Bay honey firm reports result

GROWTH FOCUS: Comvita says it wants to keep growing earnings per share from its solid base. PHOTO/FILE

Bay of Plenty honey and health products company Comvita has announced a net profit after tax of $18.5 million on sales of $231m.

This compares with the unaudited result of a net profit after tax (NPAT) of $17.2m on sales of $202m reported to the market in the 12 months to March 2016.

The company announced this year that it was shifting to a June-year balance date.

Chairman Neil Craig said it was important to note that as advised on May 10, Comvita expected the 15-month operating result to June 30 this year to be similar to the result reported for the 12 months to March 31, 2016, of $17.2m.

"After adjusting our reported and audited NPAT to 30 June 2016 of $18.5m for favourable non-operating changes in fair value of assets, primarily Derma Sciences and SeaDragon, it is pleasing to have delivered $17.1m against this guidance."

Craig said Comvita continued to be focused on growing earnings per share from the solid business base established over the past 10 years.

The earnings before interest, tax, depreciation and amortisation (EBITDA) margin for the 15-month period was 17.1 per cent and return on capital employed was 14.3 per cent, which represented good performance growth compared with last year's figures of 15 per cent and 12 per cent respectively, he said.

Comvita paid a fully imputed second interim dividend of 10c a share on June 24, for shares registered on June 17. This brought the total interim dividend for the 12 months to 16c a share (compared with 13c a share in 2015).

With the change in balance date to June 30, a final dividend of 2c a share will be paid on September 23, bringing the total payment to 18c each for shares registered on September 16.

The payout ratio for the 15-month period is about 42 per cent of operating profit. This is lower than Comvita's previously adopted 50 per cent of after-tax operating profits.

With the growth opportunities being presented to Comvita on an ongoing basis, the board had decided to change the dividend payment policy to 40 to 45 per cent of after-tax operating profits, the company said.

Comvita chief executive Scott Coulter said sales of $130m were recorded in Australia and New Zealand over the past 15 months, driven by the re-export market to China.

"Australia is now our largest market with sales of $74 million over the last 15 months and has contributed significantly to our result," Coulter said.

China sales grew strongly and in particular sales through the various e-commerce platforms and the 400 branded retail outlets operated by Comvita's dedicated Chinese distribution partner.

Comvita supplies all China's major e-commerce platforms.

"We are focused on the delivery of $400m of sales in five years' time and solid growth in earnings per share over this period," said Coulter.

The two key building blocks of the firm's strategy were security of supply and new product innovation.