Comvita returns respectable profit

Comvita has returned a respectable profit despite rising honey costs thanks to strong demand for its products in Asian markets.

The Paengaroa-based natural health and beauty products company today announced a $7.4 million after tax profit for the year ending March 31, 2013.

This was in spite of an increase in Manuka honey prices of up to 50 per cent last year, Comvita Chairman Neil Craig said.

"Given the constraint on the supply of Manuka honey, one of our most important ingredients, we are satisfied with our financial results.

"Our significant investment in sales and marketing infrastructure in key export markets over the last few years has allowed us to pass on raw material price increases without dampening demand, albeit with some lag in financial impact on our profits."

"We have taken steps to shore up our Manuka honey supply with long term supply contracts, the acquisition in October 2012 of another large Manuka honey apiary business and the expansion of hive numbers. With 16,000 hives, Comvita is now one of the largest beekeepers in the country."

Mr Craig said the 2013 Manuka honey harvest has been much better than last year's and he expected the raw material supply to return to normal this year.

Comvita broke through the $100 million revenue mark for the first time, with $103.5 million of annual sales in the year to March 31.

Chief executive Brett Hewlett said he was delighted with the result, particularly against the challenges of a high New Zealand dollar and increased honey costs.

"Market demand for our entire range of products remains strong. However, in Australia, the United Kingdom and Europe, trading continues to prove challenging," he said.

"Growth in sales has been enabled by leveraging our premium brand positioning. This allows us to be relatively assertive in achieving price increases to reflect the increase in costs.

"We are also able to take advantage of our diverse markets and channels. We have, for instance, withdrawn from the least profitable sectors of the UK market and redeployed those resources to concentrate on the growing and profitable markets of North Asia - notably China, Hong Kong and Korea."

Asian markets now account for 44 per cent of Comvita sales, Mr Hewlett said.