Comvita shrugs off takeover bid as it posts $2.2m gain

Neil Craig. Photo / Supplied

Listed takeover target Comvita said it was on track to meet its full-year earnings forecasts after reporting a $2.2 million net profit for the six months to September 30.

The result compared with a $2.2 million net loss - mostly reflecting a $1.5 million one-off tax charge - in the previous corresponding period.

Comvita, which is the subject of a $2.50-a-share takeover offer from Singapore's Cerebos Pacific, said its "normalised" net profit - which was adjusted for items it said did not reflect the normal operations of the business - was $2.6 million compared with a $400,000 profit in the previous corresponding period.

Sales in the six-month period were $41.8 million, up 14 per cent from $36.6 million a year earlier.

The company, which sells its Manuka honey-based products to 14 countries, said it was on track to meet the forecast for the full year ending March 2012 of sales in the range of $91 million to $95 million, up from last year's figure of $82 million, and a normalised net profit of $7.3 million to $8.2 million, up from an actual net profit of $3.6 million a year earlier.

The first-half normalised net profit exceeded the company's September 14 guidance by about $400,000, largely as a result of strong sales over the September month.

Comvita's board has said Cerebos' $72 million bid is opportunistic and unwanted.

Chairman Neil Craig said the position had not changed: "It undervalues the company by a considerable margin, which is a nice way of putting it."

Comvita has advised shareholders not to accept the offer and to await the delivery of the target company statement, which will include a report from consultants Grant Samuel, next week.

Comvita announced an interim dividend of 4c a share. It did not pay a half-year dividend last year. Shares have consistently traded above the offer price. The stock closed yesterday at $2.85, up 5c.