Comvita approves issue of new shares

Monday 19th April 2004

Comvita shareholders have approved the issue of new shares totalling $7.5 million.

Shareholders approved, at the annual meeting, the issue of 3,658,537 ordinary sharesat $2.05 per share.

Applications for the issue, which is being managed by ABN AMRO Craigs, will close on May 14.

It was agreed a pool of 750,000 of the shares would be set aside for preferential allocation to existing shareholders.

Comvita chairman Bill Bracks said against a background of major events such as SARS and a steadily appreciating New Zealand dollar, Comvita achieved sales revenues of $22.56 million and NPAT of $1.146 million in the last financial year (ending December, 2003). While slightly below forecasts, revenues showed a solid improvement over 2002 results.

"Prudent forward exchange contracts buffered the company against the dramatic rise of the New Zealand dollar," he said.

"In stark contrast to the previous year, 2003 saw the largest honey harvest on record contributing to an oversupply of our main raw materials. Manuka honey intake exceeded expectations."

Comvita chief executive Graeme Boyd, said exports to the key markets of Australia, UK, Hong Kong and Japan grew by 32%in 2003.

"Comvita Japan performed well increasing sales by 93% and achieving a small profit, a significant turnaround from 2002," he said.

"Overall, Comvita""'s sales grew by 21% last year. Our five-year compounded rate of growth is running at 23%."

Boyd said the acquisition of Bee & Herbal NZ Ltd. and Apimed Medical Honey Limited was a highlight of the year.

"The acquisition of Bee & Herbal has strengthened Comvita's purchasing position for supplies of manuka honey and reinforced its important relationships with commercial beekeepers. Apimed, as a new development company, has its value in intellectual property and patents. It acquired patents developed by the University of Waikato for technology to form a manuka honey gel used for wound dressing applications.

"These acquisitions, together with an increase in inventories, resulted in a greater level of debt than we consider optimal. The intention to raise equity capital during 2004 will restore strength to the balance sheet, enabling us to realise future growth aspirations."

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