Comvita affirms guidance for 25% gain in full-year profit

Comvita affirms guidance for 25% gain in full-year profit

By Jonathan Underhill

April 20 (BusinessDesk) - Comvita, the Te Puke-based maker of health products based on manuka honey, affirmed its guidance for a 25 percent rise in full-year earnings, saying it has sufficient supplies of honey to meet growing sales.

Profit in the year ended March 31 was $9.5 million, up from $7.6 million a year earlier, the company said in a statement today. Sales rose 24 percent to $142.5 million. The company first made the forecasts at the time of its renounceable rights issue last November. It will release full-year audited results on May 22.

"Comvita has good sales growth momentum carrying into the new fiscal year," the company said. "The business infrastructure is geared to meet the demands of another growth year. The honey supply situation is looking relatively stable and growing at least in line with our short to medium term sales forecasts. Our outlook is for another good year of both sales and earnings growth."

Comvita raised about $24 million last year via a rights issue to repay debt, fund its honey inventory and make further acquisitions after a three-year effort to increase its direct ownership of manuka honey supply, including the purchase of Timaru-based New Zealand Honey Producers Cooperative for $12.3 million last July. It also has a joint venture, Kaimanawa Honey, with East Taupo Lands Trust to harvest manuka honey from 3,000 hives on Ngati Tūwharetoa trust's land holdings.

The company now has about 50 percent of its honey supply under direct control, with the balance of supply from long-term contractual and partnership arrangements.

The shares fell 0.8 percent to $3.97 and have gained 27 percent in the past 12 months.

(BusinessDesk)

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