Comvita forecasts 35% boost to annual earnings, farewells CEO Brett Hewlett

Thursday 23rd July 2015

Comvita, the maker of health products based on manuka honey, has forecast a 35 percent gain in annual earnings and has signalled the exit of its chief executive Brett Hewlett at its annual shareholders meeting.

The Te Puke-based company's forecast earnings growth accelerates from its record profit of $10.2 million in the year ended March 31, 2015 it reported in May. The company also told shareholders it expects annual revenue to be in excess of $180 million in the coming year, up from $152.7 million.

Hewlett also flagged he will end his decade-long tenure as head of the company next March. He will be invited to join the board in the 12 months following his departure.

Comvita has benefited from a surge in manuka honey prices, based on Asian demand for the kiwi honey and its purported health benefits. Almost one third of Comvita sales come from Asian markets, including 400 stores in the company's core market of China. Now the company has a sales target of $400 million with "sustained earnings growth" by 2020.

The company is looking to control 100 percent of its raw honey supply through long-term contracts and ownership of apiaries. 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 direct ownership of manuka honey supply, including the purchase of Timaru-based New Zealand Honey Producers Cooperative for $12.3 million last July.

Comvita shares rose 4.4 percent to a record $4.75. That’s 80 cents above its one-for-five rights issue off price of $3.55 per-share last December.

BusinessDesk.co.nz

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