Strong first half result for takeover target Comvita

Honey products company Comvita has announced a stronger than expected first half as directors urge shareholders to reject the $71.6 million offer to buy the company by Cerebos New Zealand.

The global natural health and beauty company's net profit after tax for the six months to September 2011 was $2.2 million, a turnaround on a $2.2 million loss for the same period in the previous year.

New Zealand chairman Neil Craig told the annual shareholders meeting in June that the company was comfortable it would have a significantly better financial result in 2011/12.

Comvita's net profit for the year ended March 2011 had fallen to just $0.5 million from $5 million the previous year with sales falling to $82 million from $85 million.

In the first half of the current financial year, sales rose to $41.8 million, compared with $36.6 million in the first half last year.“This is a strong result.

Positive trading activity in all key markets combined with on-going operational improvements has delivered sales and earnings significantly better than the previous two years,” Craig said.

The company also confirmed previous revenue and earnings forecasts for the full year, with the second half’s trading traditionally stronger than the first.

The company will hold a conference call for investors and the media to discuss the result at 12.30 today, at which directors are expected to use the result as evidence that the Cerebos bid should be rejected.

A target company statement and independent appraisal are due on the Cerebos bid by Nov. 22.

BusinessDesk.co.nz

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