Comvita hits record $8.2m profit

Comvita is involved in natural health and beauty products - much of it derived from manuka honey. Photo / Supplied

Former takeover target Comvita New Zealand said its net profit for the year to March hit a record $8.2 million.

The result compared with a net profit of $0.5m in the previous year, which was depressed by $3.1m in one-off costs.

The latest net profit is at the top end of last year's earnings guidance of $7.3m to $8.2m. Comvita is involved in natural health and beauty products - much of it derived from manuka honey.

The company successfully fought off a $2.50 a share takeover bid last October from Singapore-based Cerebos Pacific.

At the time, a valuation conducted by consultants Grant Samuel put Comvita's value at $3.40 to $4.00 a share, which was too much for Cerebos.

Comvita shares traded today at $3.00, up 10c from Tuesday's close, and up from $1.58 a share before the announcement of last year's bid from Cerebos.

In today's result, Comvita said its earnings before interest, tax, depreciation and amortisation rose to $15.5m from $6.3m. Sales rose to $96m from $82m.

Comvita declared a fully imputed dividend of 10 cents per share, bringing the total for the year to 14c, up from the previous year's total of 3c.

Chairman Neil Craig said it was a pleasing result, considering the Cerebos bid tied up management for four months.

Comvita increased its dividend payout to 50 per cent of its net profit from 40 per cent, which Craig said was a reflection of the company's confidence in future earnings.

At balance date, Comvita had $13m net borrowings at year end and an investment in
US-based NASDAQ listed advanced wound care and pharmaceutical company, Derma Sciences Inc, with a market value of about $12m.

Sales in Australia and New Zealand were up 13 per cent and improved by 31 per cent in Asia.

Comvita's biggest shareholder is co-founder Alan Bougen, who has 10.2 per cent.

Bougen's holding, together with the holdings of staff, other interests closely associated with the company and the Butt family Hong Kong, represent a voting bloc of around 30 per cent. The company has a large shareholder base in the Bay of Plenty.