Sweeter second half helps Comvita exceed forecasts

A secure honey supply helps Comvita's bottom-line. Photo supplied.
A secure honey supply helps Comvita's bottom-line. Photo supplied.
Comvita comfortably exceeded the company's earlier forecasts when it reported record earnings for the year ended March.

The company's operating earnings were up 35% to $23million from $17 million in the previous corresponding period, the reported profit was up 28% to $10.2 million from $8 million and revenue was up 32% to $152.7 million from $115.3 million.

Earnings per share increased 14% to 29.9c and the dividend was increased to 13c per share, up 8c.

Comvita is New Zealand's largest integrated producer and marketer of honey and bee-related products.

Craigs Investment Partners broker Chris Timms said the result was ahead of expectations.

''Comvita has historically had a year of two profit halves with the second-half earnings stronger than the first half. This is due to many product lines being consumed in the northern hemisphere winter months.''

The effect was compounded by Asian tourists purchasing products in New Zealand and Australia during the peak tourism season of summer.

In the second half of 2014, Comvita achieved 62% of full-year sales and was forecasting 58% of 2015 sales to occur in the second half of the financial year.

Last year, Comvita announced the acquisition of New Zealand Honey, one of the largest exporters of honey and the producer behind brands like Hollands Honey, 3 Bees and Sweet Meadow, Mr Timms said.

The strategic logic behind the move was to ensure security of supply for Comvita, something which would help avoid the issues faced in recent years when supply constraints had been a problem.

Comvita chairman Neil Craig said in release to the NZX the company's balance sheet was in good shape and it had successfully completed a $24.4 million capital-raising in December last year.

The proceeds had been used to reduce borrowings and further support a build-up of honey inventory, as well as providing financial capacity to consider future acquisitions. Any acquisitions would need to fit with investment criteria.

Speaking about the result, Mr Craig said sales, driven by record tourism numbers and growth in the New Zealand market had been outstanding, along with sales in Comvita's second-fastest growing market of Australia.

Globally, fresh Olive Leaf Extract sales had shown 27% year-on-year growth. An upwards trend continued in the China market and worldwide and online sales increased 55%.

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