Tuesday 19th February 2013
|Text too small?|
Comvita, which produces health products from manuka honey and olive leaves, expects a 15 percent fall in annual profit because of expensive honey, supply shortages and tough trading conditions in the UK and Australia.
The Te Puke-based company expects net profit of $7 million in the year ending March 31, down from $8.2 million a year earlier which it had been expecting to beat, Comvita said in a statement. Sales are forecast to rise 4 percent to about $100 million. The profit warning comes after increases in wholesale honey prices of up to 50 percent, and weak consumer confidence in Australia and the UK, which made it hard to pass on rising costs.
"While we regret the need to downgrade the earnings outlook for this financial year, we remain confident that the reasons for the downturn are isolated and that mitigation measures are already in place," the company said. "The current strategy still holds with business on a path of strong earnings growth beyond this financial year."
The stock fell 1.3 percent to $3.85 in trading yesterday, and has gained 5.1 percent this year. It's rated a 'hold' by the one analyst following the company, according to Reuters data, with a target price of $3.65.
Comvita has been on a buying spree in the past year to lift its direct beekeeping ownership, producing a third of its honey needs, and last month bought an 85 hectare organic olive estate that has the potential to more than meet its requirements.
The company will announce its annual result in late May.
NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.
No comments yet
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 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
Comvita's net profit surges to a record, dividend jumps