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Comvita Announces 2004 Profit

February 28, 2005

Comvita Announces 2004 Profit

NZAX-listed Comvita today announced after tax earnings of $1.26 million for the year to December 2004 and payment of a fully imputed dividend of 2.1 cents per share.

While this dividend is in line with projections included in the prospectus for the company's public offering in April last year, after tax profit is $0.32 million below the prospectus projection but ahead of the update provided to the market in November 2004.

Total revenue for the year was up 22% on last year to $27.6 million, and earnings before interest, tax, depreciation and amortisation was up 27% on last year to $3.64 million.

Comvita chairman Bill Bracks says while early sales of manuka honey impregnated wound dressings have been below expectations, the 2004 result was under-pinned by good growth in sales of consumer products.

"The medical industry is conservative and regulatory delays had meant sales of wound dressings were lower than projected. However, Comvita is now much closer to being able to profit from its manuka wound dressing technology," Bracks says.

"A pleasing aspect of the result is that underlying profitability grew faster than sales. Australia, Japan, Hong Kong and the UK markets experienced good growth and the ratio of export to local sales increased from 43% to 49% as a result.

"Comvita's strategy of having its own people in offshore markets rather than working through distributors is paying off. Japan hit profitability this year, Hong Kong hit new records and Australia traded strongly. The first Comvita store opened in Shenzhen, China in December and others will follow.

"Diversity in those markets provides a broad earning base and reduced reliance on the outbound tourism market which can be subject to unpredictable international events," Bracks says.

Sales from recent Bee and Herbal acquisition have contributed to growth in the first full year since it was acquired, with UK sales of Bee and Herbal products complementing an already solid market position.


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