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Comvita Approves $7.5m Public Offering

News Release April 18, 2004

Comvita Approves $7.5m Public Offering

The issue of a further 3,658,537 ordinary shares in Comvita Limited, totalling $7.5 million, was unanimously approved at the company's annual general meeting yesterday. Their issue price is $2.05 per share.

Applications for the issue, which is being managed by ABN AMRO Craigs, will open tomorrow and close on May 14.

It was agreed a pool of 750,000 of the shares would be set aside for preferential allocation to existing shareholders.

The public offering follows Comvita's launch as a member of the highly publicised 'first fifteen' onto the NZAX - an event described by Comvita's chairman and new recipient of the New Zealand Order of Merit, Bill Bracks, as a major milestone in the company's 30-year history.

Bracks said against a background of major events such as SARS and a steadily appreciating New Zealand dollar, Comvita achieved sales revenues of $22.56 million and NPAT of $1.146 million in the last financial year (ending December, 2003). While slightly below forecasts, revenues showed a solid improvement over 2002 results.

"Prudent forward exchange contracts buffered the company against the dramatic rise of the New Zealand dollar," he said.

"In stark contrast to the previous year, 2003 saw the largest honey harvest on record contributing to an oversupply of our main raw materials. Manuka honey intake exceeded expectations."

Bracks pointed to major growth in Comvita's export markets, emphasising that understanding the culture and nuances of foreign markets remained a key success factor in the company strategy.

The long-serving chairman of Comvita announced at yesterday's well-attended meeting he'd be stepping down as chairman at the 2005 annual general meeting - an announcement which prompted expressions of disappointment from many in attendance.

Comvita's CEO, Graeme Boyd, said exports to the key markets of Australia, UK, Hong Kong and Japan grew by 32 per cent in 2003.

"Comvita Japan performed well increasing sales by 93 per cent and achieving a small profit, a significant turnaround from 2002," said Boyd.

"Overall, Comvita's sales grew by 21 per cent last year. Our five-year compounded rate of growth is running at 23 per cent."

Boyd said the acquisition of Bee & Herbal NZ Ltd. and Apimed Medical Honey Limited was a highlight of the year.

"The acquisition of Bee & Herbal has strengthened Comvita's purchasing position for supplies of manuka honey and reinforced its important relationships with commercial beekeepers. Apimed, as a new development company, has its value in intellectual property and patents. It acquired patents developed by the University of Waikato for technology to form a manuka honey gel used for wound dressing applications.

"These acquisitions, together with an increase in inventories, resulted in a greater level of debt than we consider optimal. The intention to raise equity capital during 2004 will restore strength to the balance sheet, enabling us to realise future growth aspirations."

Boyd said the new technology acquired for the development of a range of wound dressing medical devices based on New Zealand's unique UMF Manuka Honey offered exciting opportunities.

"To successfully exploit this technology, big demands will be made on Comvita's ability to build on the early product development phase and grow this new business in conjunction with large overseas partners. These companies have the manufacturing expertise and structures to access primary healthcare institutions such as the National Health Service in the UK."

END

Website: www.comvita.com

Comvita Limited

Comvita Limited had its beginnings in the beekeeping interests and nutritional philosophies of its founder Claude Stratford. Comvita makes natural healthcare products of the highest quality using honeybee raw materials and other plant based extracts.

The company's traditional philosophy has been that prevention is better than cure. This is reflected in its products for immune-boosting, digestive health and general wellness.

The recent launch of its Cambridge-based Medical Division following the acquisition of Bee & Herbal NZ Ltd. and Apimed Medical Honey Limited, takes Comvita toward the curative end of the health spectrum. Its flagbearer product is manuka honey wound dressings. The Comvita Medical Division received its first export order, in March this year, from UK wound care product manufacturer Brightwake.

Comvita's manufacturing plant at Paengaroa is licensed and audited to the internationally-recognised GMP (Good Manufacturing Practice) standard for complementary health products. Its acclaimed on-site Visitor Centre is also working toward Green Globe 21 accreditation.

The company employs more than 100 people in New Zealand, Australia and Japan. Its specialist teams work alongside scientists and research organisations to create safe, effective health solutions based on the very best natural ingredients New Zealand has to offer.

Comvita has been the recipient of many awards - the most notable recent one being the 2003 Consumer Products Exporter of the Year in the Trade New Zealand National Export Awards.

Comvita joined a select group last year when it became a member of the 'first fifteen' listing onto the new NZAX market. Sales in 2003 totalled $22.56 million - a 21 per cent increase over 2002. This is considered an excellent result in the face of major events such as SARS and a steadily appreciating New Zealand dollar.

Website: www.comvita.com

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