Comvita sees annual earnings lift of up to 32%, bemoans bigger half-year split
By Paul McBeth
Sept. 24 (BusinessDesk) - Comvita, which produces health products derived from manuka honey, sees annual earnings growth of up to 32 percent, while bemoaning a growing imbalance between the first and second halves of the year.
The Te Puke-based company expects net profit of between $9 million and $10 million in the year ending March 31, 2015, up from $7.6 million a year earlier, on revenue of between $140 million and $145 million, up from $115 million, it said in a statement. That will largely come through in the second half of the year, due to uneven sales between the northern and southern hemispheres, and after the honey harvest is collected between January and May next year, which will generate revenue from the beekeeping operations.
The split in half-year performance means Comvita anticipates to report a net loss of $4 million in the six months ending Sept. 30 on sales of $56 million, compared to a net loss of $800,000 on revenue of $43 million a year earlier. The loss stems from the accounting treatment of the beekeeping operations, a revaluation of its warrants in Nasdaq-listed Derma Sciences, and acquisitions costs from New Zealand Honey.
"We thought it was important to communicate how the changes to the business impact in the half year and full year reporting," chief executive Brett Hewlett said. "The performance of the business is trending in line with internal forecasts and we expect to be able to report an increase in net earnings of greater than 20 percent for the full year."
In July Comvita acquired Timaru-based New Zealand Honey Producers Cooperative for $12.3 million, the latest in the firm's pipeline of apiary acquisitions to shore up its own supply of raw honey.
The shares were unchanged at $3.65, and have edged up 0.6 percent this year, lagging the 7.1 percent gain on the NZX All Index over the same period. The stock is rated a 'hold' according to the one analyst recommendation compiled by Reuters, with a price target of $3.64.