Comvita lifts annual profit 28 percent, beating expectations

Comvita lifts annual profit 28 percent, beating expectations

By Suze Metherell

May 22 (BusinessDesk) - Comvita, the Te Puke-based maker of health products based on manuka honey, boosted annual profit 28 percent, beating expectations as tourism to New Zealand helped drive sales.

Profit rose to a record $10.2 million in the year ended March 31, up from $8 million a year earlier, and ahead of the $9.5 million it flagged in April. Sales rose 32 percent to $152.7 million, and earnings before interest, tax, depreciation and amortisation rose 35 percent to $23 million, the company said in a statement.

The board declared a dividend of 9 cents per share, taking its total dividend to 13 cps, up from 12 cps a year earlier.

“Sales, driven by record tourism numbers, and growth in the New Zealand market have been outstanding, along with sales in our second fastest growing market of Australia," chief executive Brett Hewlett said. "Globally, fresh Olive Leaf Extract sales have shown 27 percent year-on-year growth. An upwards trend continues in the China market and worldwide; web sales increased 55 percent."

Comvita raised some $24 million last year in 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 company was in a position to consider acquisitions, said chairman Neil Craig. "Any acquisitions will need to fit within both our existing investment criteria and product platforms and be earnings accretive in the short term.”

Comvita also used $1.7 million of the capital raised to exercise its warrants to lift its shareholding in Nasdaq-listed Derma Sciences to 4 percent, saying it helped secure its access to the "global medical honey wound care market.”

Shares of Comvita last traded at $4.15 and have gained 12 percent since the start of the year.

(BusinessDesk)

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