Comvita Limited (NZX: CVT) Turnaround on Track at Comvita

Thursday 25th February 2021

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Headlines

- Reported NPAT $3.5M vs. ($13M) in PCP

- Reported EBITDA* $10.6M vs. ($8.8M) in PCP, an improvement of $19.4M

- Reported revenue $98.9M, +5.5% vs. PCP

- Double-digit top and bottom-line growth in focus growth markets

- Net debt reduction** $1.6M, Inventory reduction** $14M, Operating cash inflow $9.4M

- Gross Profit +1080 bps, +28.3% vs. PCP

- Marketing Investment +$2.1M or +25%

- $15M business transformation plan on track: Additional $10M transformation phase two launched

- 37% reduction in total recordable injury frequency rate (TRIFR)

- Full year guidance maintained; dividends expected to resume at full year

Comvita today announced that for the six-month period ending 31 December 2020, it returned to profitability with net profit after tax (NPAT) reported as $3.5M versus a $12.97M loss in the prior corresponding period (PCP).

Reported EBITDA was $10.6M versus a loss of $8.8M in the PCP. Revenue increased to $98.9M, +$5.5% versus PCP, or 6.7% in constant currency, with strong growth seen in focus growth markets and its core Mānuka category. Marketing investment designed to support Comvita’s long-term growth ambition increased by 25% on the PCP as Comvita activated plans to drive brand affinity and tell its founding story to discerning consumers around the world.

Commenting on the performance, Comvita Chairman, Brett Hewlett, said “We’re pleased with the progress the team has delivered over the last year. The Board and management have continued to transform the business at pace looking to ensure we deliver the performance that all Comvita stakeholders should expect. The result shared today shows that the ongoing transformation is multi-dimensional with revenue, margin, and earnings improvements, along with good financial and capital disciplines evidenced in net debt reduction, inventory reduction and cash generation. In line with our previous disclosure, and subject to delivering full year guidance, the Board reconfirms its commitment to resume dividend payments at the end of this financial year.”

Group CEO, David Banfield, says “The team and I are encouraged by the results that we share today. We remain totally focused on delivering our new long-term sustainable business model that will enable us to simplify and streamline the business further, invest in telling our unique brand story to discerning consumers around the world, and connect with our fantastic in-market teams to deliver the most compelling consumer proposition in market. We look forward to sharing further progress over the course of the second half of the year.”

Full year guidance maintained

Comvita maintained full year guidance of an EBITDA range of NZD $20-$23M in the period ending 30 June 2021. Comvita also reaffirmed its intention to resume dividend payments following delivery of its full year guidance.

Please see the links below for details:

Turnaround on track at Comvita

Results announcement

Interim Financial Statements

Investor Presentation

Source: Comvita Limited

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