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Clover Corporation Down 24% With The Release Of Half-Yearly Reports

Stuart Lucy

Stuart Lucy is an Investment Specialist at the Australian Stock Report, and has gained exposure to funds management and investment banking throughout his career. He draws on this experience to provide macroeconomic commentary and actionable investment insights to clients. Stuart is responsible for writing reports, is involved in delivering Macrovue webinars and provides general advice to our members on portfolio construction. Stuart currently holds RG146 General and Securities qualifications.

Clover Corporation (ASX: CLV) sold off heavily in the opening session with the release of the company’s half-yearly report. The underlying performance of the company during the coronavirus pandemic was unaffected in the supply chain and strong demand for powdered infant milk is still popular in Australia and overseas market. Despite positive improvements in the half-yearly report, the continued fear of the coronavirus has affected the share price of the company with deep sell-off in today’s session.



The company recorded a net profit after tax of $4.6m (up 3.4%) and Net Sales Revenue of $37.6m (up 9.8%). Whilst the operating cost has risen to $5.5m (up 20%), the profit improvement and attraction of new customers has offset any worry that the company is wasting the capital used. The operating expenses were mainly used for marketing, sales personnel, admin cost and R&D activity. In the US market, the company saw its saw sales go up 57% compared to last year’s half-yearly report. This is most likely attributed to the new products released to the market with Omega 3’s delivered in food rather than tablets. Clover Corporation's investment into growth has led them to increase brand awareness and obtain new customer base around the world, amidst the coronavirus pandemic. The company is fundamentally sound for the short-term and long-term with the company already prepared for the new regulations of DHA infant formula in China and Europe.

Clover Corporations is an Australian company that distributes Omega 3 and Omega 6 through infant formulas and tuna oil encapsulations pills. Omega 3 has proven to help with brain development, cardiovascular health, and visual acuity. Omega 3 or their tuna oil is delivered by their patented microencapsulation technology whereby the tuna oils are converted into a stable dry powder form. The dry powder form protects the ingredients from oxidation. The technology has given them a natural competitive advantage over other rivals by allowing them to extend the shelve life of their products. This is critical for the business because it allows consumers to store the product over a long period of time, without having to worry about when to purchase the Omega 3 products again.



This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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