Comvita expects sharp fall in full year profit

Thursday 31st March 2011

Better last quarter results have not been enough to save natural healthcare company Comvita from a sharp fall in full year results.

For the financial year finishing today, the company said it was expecting the reported result to be in a range between a $400,000 profit and a $200,000 loss on forecast sales of about $81 million.

That compared with a net profit after tax of $5 million and sales of $84.9 million in the previous financial year, Comvita said today.

On a normalised basis, the forecast range for net profit was between $2.8 million and $3.4 million, compared to a profit of $5.7 million a year earlier.

Several one-off items accounted for the difference between the normalised and reported results.

The main factors were a non-cash tax expense of $1.5 million after tax after a change to the law on depreciation on buildings, an already announced and provided for expense of $2.2 million after tax for the defence of a medical patent in Britain, a write down of intangible assets of $740,000 after tax and the revaluation of warrants held in Nasdaq-listed Derma Sciences of $950,000 after tax.

The sales trend and profit for the last quarter were much improved, but the sales and profit numbers for the full six month period were lower than the same period in 2010.

"It has proved to be too difficult to make up for the poor results in the first half," Comvita said.

"Problems were experienced with a soft Australian retail market further impacted by the mild southern hemisphere winter and the Queensland floods."

Full results were to be published on May 20.

NZPA

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