Comvita reports small loss

NEW ATTRACTION: Department of Discovery managing director Andrew Te Whaiti (left) and Comvita chief executive Brett Hewlett at this week's opening.

Comvita has reported a first-half small loss as its margins were squeezed by expensive honey and as trading conditions in Australia and the UK were stretched by stiff competition.

The Paengaroa-based company made a loss of $790,000, or 2.7 cents per share, in the six months ended September 30, from a profit of $2.39 million, or 7.95 cents, a year earlier, it said in a statement. Sales fell 4.6 per cent to $43.4 million.

That was in line with guidance last month, and Comvita affirmed its annual forecast to beat last year's profit of $7.4 million and sales of $103.5 million, with about 60 per cent of revenue expected to come in the second half.

"Trading conditions in most markets have been challenging throughout the six month period, but in particular in the wholesale markets of Australia and the United Kingdom, where we have limited sales direct to the consumer, price competition was strong," chief executive Brett Hewlett said.

"Raw Manuka honey costs remain high and have impacted our gross margins over the last 12 to 18 months."

The results follow the official opening this week of the company's 'Experience Comvita' - an expanded visitor attraction at its Paengaroa site.

The purpose built attraction has been developed in a joint venture with tourism company, The Department of Discovery, and has extended the existing Visitor Centre (established in 2003) to a total of 840sq m.

"Based on our experience over the last 10 years, we know that visitors go on to become very loyal customers. This new tourism experience will build Comvita's brand equity, through increasing our brand recognition with visitors from key markets such as Asia, Europe and Australia," Mr Hewlett said.

"Aside from taking advantage of the growing recognition of our brand and products in international markets, Experience Comvita will further build brand reputation by engaging the visitor in our unique New Zealand story; how we are being connected to nature, the source of our ingredients and how this connection, combined with research and science, enables people to live more healthy, vibrant lives."

Mr Hewlett said the development of Experience Comvita signalled the company's commitment to remaining in Paengaroa and continuing to be part of the community, as it had been since its inception in 1974.