Sales momentum surpasses Comvita's forecasts

Chief executive Brett Hewlett

Comvita has reported a net loss after tax of $3.3 million on sales of $59.7 million for the first six months to 30 September, 2014, in line with earnings guidance earlier in the year, but is forecasting a profit for the full year. The company also announced a one-for-five renounceable rights issue in December, which aimed to raise up to $24.4 million from existing shareholders.

The six-month result compared to a reported net after tax loss of .8 million and sales of $43.4 million for the same period of the prior year.

The half-year result reflected the accounting treatment of Comvita's beekeeping operations, a negative impact of the non-cash revaluation of warrants held in Nasdaq-listed Derma Sciences and the one-off costs associated with the acquisition of New Zealand Honey.

For the year to the end of March, 2015, Comvita forecast sales of $142.5 million, a 24 per cent increase from $115.3 million in the prior year, and a net profit after tax of $9.5 million, a 25 per cent increase from 2013-14.

Chief executive Brett Hewlett said the half-year result was partly due to the imbalance of sales between the Northern Hemisphere and Southern Hemisphere seasons.

"Another key contributing factor is that ownership of a very large beekeeping operation has resulted in structural changes to the business," he said.

Mr Hewlett said sales momentum had continued to build, surpassing expectations in the key markets, but noted the profit projection was sensitive to the outcome of the summer honey harvest, the value of product sales and the value of the warrants held in Derma Sciences.

Comvita aimed to raise up to $24.4 million from existing shareholders through its one-for-five rights issue.

Shareholders can either buy shares under the terms of a renounceable rights issue, sell them on the market, or pass on taking up the rights.

Chairman Neil Craig said the issue would strengthen the balance sheet, providing working capital for honey inventory and capacity for value enhancing acquisitions.