Comvita upgrades annual profit guidance; shares jump to a record

Tuesday 10th November 2015

Comvita, the manuka honey products maker, raised its annual profit guidance after first-half revenue jumped 52 percent, driven by sales in New Zealand, Asia and Australia. Its shares soared to a record high.

The Te Puke based company turned to a profit of $3.04 million in the six months ended Sept. 30, from a loss of $3.3 million a year earlier, it said in a statement. Sales gained to $91.1 million from $59.7 million.

"At our annual meeting on 23 July 2015, we advised the market that our earnings would be at least 35 percent in excess of the full year ended 31 March 2015," said chairman Neil Craig. "With the strong result for the first six months we now expect our operating profit after tax to be in the range of $15-$17 million, up 46 percent to 65 percent for the 12 months to 31 March 2016, compared to the prior year."

The shares soared 7.2 percent to a record $7.45. Before today, the stock had gained 88 percent so far this year.

Comvita has benefited from a surge in demand for manuka honey products, especially in Asia, where they are sought for their purported health benefits. First-half sales in Asia grew 53 percent to $30.3 million from the year earlier period. Australian sales increased 72 percent to $28.7 million.

The company is also expanding its range of profits, having launched olive leaf based preparations and in September buying a 19.9 percent stake in SeaDragon, which gave the health products maker a secure supply of fish oil to expand its health supplement range. In May 2014, Comvita bought the the Timaru based honey producer New Zealand Honey for $12.3 million, as part of a strategy to secure supplies of the raw material.

Comvita will pay a 6 cents a share dividend on Nov. 27, up from a 4 cent dividend in the year earlier period.

BusinessDesk.co.nz

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