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Comvita announces solid profit
Comvita Limited has announced a solid half-year net
profit after tax of $673,900 for the six months to June 30, an
increase of 11.5 percent over the corresponding period last year,
while total revenue for the half year was $13,9 million against
$10.9 million for the corresponding period last year.
Earnings per share for the same period amounted to 6.88cps compared
to 6.58cps for the corresponding half year based on a weighted
average number of shares on issue at the time. The EBITDA, or cash
earnings before interest and tax, for the half-year was $1.96
million, an increase of 53 percent over the 2003 half-year figure.
Confidence in the company that won the large
business sector award at the Environment Bay of Plenty Sustainable
Business Awards in June is reflected in the current strong growth in
its share price.
Announcing the result in his half-yearly report, Comvita chairman
and recent recipient of the New Zealand Order of Merit, Bill Bracks,
says the net profit was 7.5 percent ahead of projections.
"It was a particularly satisfying result considering the fluctuating
trading conditions generated by such events as exchange rates and
international terrorism impacting on tourism," he says.
"Although the 21 percent increase in revenue was less than forecast,
Comvita enjoyed better margins than expected, significant foreign
exchange gains and reduced costs to deliver better than expected net
earnings."
Comvita's Board has declared an interim dividend of
2cps (ex date August 13) payable on August 27 In line with
expectations, this represents 38 percent of net profit after tax.
Full imputation credits will apply to the dividend. The Dividend
Reinvestment Plan will be reinstated for the upcoming interim
dividend after being suspended for the 2003 year final dividend
payment during March, 2004. The DRP strike price is calculated at 95
percent of the average price traded during the 60 days preceding the
record date.
Cashflow generated during the six months was a
deficit of $1.68 million - a result of increases in inventory and
accounts receivable which in turn resulted from a record sales month
in June.
Comvita's strong result follows the successful completion on May 17
of an SPO (Subsequent Public Offering) of 3,658,537 shares. The SPO
was managed by ABN AMRO Craigs and attracted wide interest,
increasing the shareholder base from 255 to approximately 900.
The company issued a prospectus in April, projecting earnings of
$1.58 million after tax for the full year. The Board remains
optimistic that the prospectus forecasts will be met. Bracks says
the company's move onto the NZAX proved timely and Comvita's share
price has seen strong growth since the SPO.
"The volume of shares trading since then has
increased by more than 300 percent. The main purpose of the capital
raising was to strengthen the balance sheet, with the resulting
shareholders funds ratio increasing from 33 percent to 65 percent.
"This positions the company well for growth in the short to medium
term, with the Board actively seeking opportunities which are a
strategic fit for the company."
Acquisition of the Apimed medical honey business is
yet to produce tangible benefits for shareholders. While Apimed
continues to move toward commercial success, progress has been
slowed by regulatory delays and increased operational and quality
disciplines required for medical devices. Commercial returns are
expected to show steady growth from next year.
Comvita's UK partner, Brightwake Limited,
successfully launched a manuka honey wound dressing in March. It has
drug tariff approval through the National Health Service and is
being successfully marketed to hospitals and pharmacies in the UK.
A new research programme between Comvita and Crop &
Food Research Limited gained support from the Foundation for
Research Science and Technology, and the acquisition of Bee & Herbal
Limited has given Comvita greater operational flexibility in the
procurement, storage and supply of its flag-bearer product, manuka
honey.
Although beekeeper production of manuka honey last
season was below average, Comvita's policy of holding higher stocks
will enable it to take advantage of increasing offshore demand.
Despite challenging domestic conditions in the first six months of
2004 with Asian tourism numbers down and a strong dollar impacting
on purchasing power, strong growth in exports to Hong Kong, Taiwan
and Japan demonstrated the success of Comvita's export activity.
Offshore highlights include securing the first order
from China, where product will be retailed through duty free
outlets, and opening a new office in Taiwan. Bracks says while the
general outlook remains fairly volatile, Comvita is confident of
meeting its profit targets for the year.
"Exports to key markets continue to grow and new business
development with Apimed wound dressings will continue to broaden our
base."
Source: Comvita Media Release, 26 July 2004 |
