Supply pinches Comvita performance

Strong Asian and New Zealand honey sales were dampened for health product company Comvita, following supply constraints, high prices and the strength of the New Zealand dollar.

For its year to March annual result, Comvita posted an 11.4% rise in revenue to $115.3 million and a 3.3% gain in after-tax profit to $7.6 million; declaring a fully imputed dividend of 12c, 1c down on a year ago.

Comvita chief executive Brett Hewlett said it was ''a year of two halves'', with first-half trading sales affected by honey supply shortages, sharp rises in the cost of manuka honey and profit margins undercut by the strong New Zealand dollar.

''Full-year earnings were suppressed by a sharp increase in the cost of honey. Supply was restored during the second half of the year,'' he said.

Those supply constraints are likely to be alleviated in the future, as Comvita this week announced its $12.3 million purchase of Timaru-based New Zealand Honey Producers Co-operative, which represents about 70 mainly South Island beekeepers whose produce turned over $27.3 million during 2013.

With its existing North Island holdings, largely for manuka honey supplies, Mr Hewlett said with the southern acquisition ''at least 50%'' of honey supply was under direct ownership, which should help ease pressure over supply shortages.

Mr Hewlett said net debt of $25.3 million was only slightly up on a year ago, leaving a ''relatively strong'' balance sheet, with growth anticipated for the year ahead in revenue and after-tax profit.


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