Sharechat Logo

Daily ShareChat: Comvita

By Jenny Ruth

Thursday 3rd June 2010

Text too small?
 Jenny Ruth

Honey products company Comvita's 19% increase in sales to $85 million for the year ended March and its 205% increase in net profit was in line with the company's guidance in April, says Selwyn Blinkhorne at Craigs Investment Partners.

The result showed robust growth despite the New Zealand dollar being consistently strong against all relevant currencies except the Australian dollar, Blinkhorne says.

“Strong sales growth was achieved in Comvita's main markets with New Zealand up 24.6%, Australia up 21.7% and Asia up 10.6%,” he says.

“The European market continues to be difficult in a recessionary environment with severe competition and very weak currencies against the New Zealand dollar.”

While European sales were down 15.2%, they account for only 10.5% of total sales.

Blinkhorne says the company's profit margins have increased for the last three half-year periods and reflect operating efficiencies, tight cost controls and rationalisation benefits achieved from its $50 million of acquisitions in 2008.

Net debt was slashed from $30.3 million in March 2009 to $11.6 million this March. “Comvita is now well removed from the vulnerable financial position of 2008 when interest cover was only 0.4 times and net-debt-to-equity was 44.5%.

Interest cover in 2010 was 5.8 times with net-debt-to-equity at 17.6%.”

Recommendation: buy.

Disclosure: Craigs Investment Partners chairman Neil Craig is also Comvita's chairman.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Comvita may not increase earnings in 2014 as higher honey prices bite, Craigs says
Comvita turned to a loss in first half, remains confident of increasing annual profit
Nasdaq-listed Derma Sciences takes 7.3 percent stake in Comvita in discounted placement
Comvita FY profit falls 10 percent , beating guidance, on honey shortage, rising costs
Comvita flags 15 percent fall in FY profit as expensive honey, supply shortages prompt downgrade
Comvita buys Aussie groves to expand olive extract output
Comvita first-half earnings fall 7.4% amid short supply
Comvita buys Whanganui-based Kiwi Honey for undisclosed sum
Comvita hits 5-yr high on early results from diabetes trial
Comvita to seek deeper pool for directors' fees at AGM