Comvita's springboard for growth

Brett Hewlett emphasised Comvita was no longer just a honey company.

Bay of Plenty honey and health products company Comvita has built a solid springboard for growth, says chief executive Brett Hewlett.

The company last week announced record earnings and a net profit after tax of $10.2 million for the year ended March 2015, up 28 per cent on the previous 12 months.

"We have strong growth potential," Mr Hewlett said, noting outstanding growth in the New Zealand market fuelled by strong tourist numbers, along with strong sales in its second-fastest growing market, Australia.

"We have a good honey supply base and that gives us a really good springboard for this year so the year ahead is picking up well."

Global sales of honey-based products had risen significantly for the year based on increased availability of raw material, including the strategic benefits of the acquisition of New Zealand Honey Ltd in July 2014.

"While the margins on these honey products are lower than the previous year, we expect overall returns to increase going forward, as we grow our higher-value Comvita-branded product lines at a faster pace than lower-valued grocery honey in a pot," he said.

However, Mr Hewlett emphasised Comvita was no longer just a honey company.

"The olive leaf extract and the medical product lines are growing well from a small base and that's all supporting the business," he said.

The olive leaf extract products now accounted for about 15 per cent of total group revenue.

Meanwhile, Comvita's relationship with Nasdaq-listed tissue regeneration company Derma Sciences had produced about $6 million of revenues, he said.

Comvita and Derma have minority stakes in each other and the US company is a key Comvita honey customer and also a source of royalty payments as the global licensee of its Medihoney products.

The royalty payments reflected a highly profitable component of overall revenue, he said.

"Derma has had some challenges around regulatory issues," said Mr Hewlett.

"They've been so successful it's taken the market by storm and there's been some pushback from competitors, but overall it's going really well."

Comvita chairman Neil Craig said the 2015 results comfortably exceeded the company's earlier forecast.

"Our investments in market development, infrastructure and systems have provided, and will continue to provide, sustainable earnings growth."