Comvita boosts profit by 35pc on record revenue, sees more growth

Comvita recorded record gross profit of $126m, up 22 per cent on the previous year. Photo / NZME

Mānuka honey exporter Comvita said net profit jumped by 35 per cent to $12.8 million in the June year on record turnover, driven by strong growth in China and North America.

Earnings before interest, tax, depreciation and amortisation (ebitda) for the period came to $30.1m, up 18 per cent - the top end of its $27 to $30m guidance range.

The company expects to report double digit earnings growth in the current 2023 year.
Revenue came to $209m, up 9 per cent, as all markets bar one returned to top line growth.

Comvita recorded record gross profit of $126m, up 22 per cent on the previous year's.
The company increased its marketing investment to $28.1m, a 16 per cent increase, as it looked to further differentiate from competition.

Net debt increased by $21m over the year, primarily due to increasing inventory to offset global supply chain disruption and prepare for forecasted demand in 2023.

The company declared a fully imputed final dividend of 3.0 cents resulting in full year dividends of 5.5 cps, an increase of 37.5 per cent.

Today's result follows a strategic review that started three years ago, which followed a period of underperformance.

"This is now the fifth consecutive reporting period where we have delivered double digit earnings growth at or above guidance," chief executive David Banfield said.

"We see real momentum in the business in all key areas but still recognise how much opportunity we have to improve further."

Banfield said the company was on track to deliver its plan of $50m ebitda by 2025.

China and North America again put on a strong performance in this period with both markets delivering strong top and bottom-line growth, and market share growth.

Revenue in mainland China grew by 9 per cent and its net contribution by 26 per cent despite material disruption to offline sales between March and June, with offline sales down by around 46 per cent during this period.

Comvita launched local collaborations with high-profile brands in China and signed new partnerships expected to realise potential in the PRC.

North America posted another strong result in the world's biggest monofloral mānuka honey market.

Revenue there increased by 29 per cent and net contribution by 78 per cent. Banfield said Comvita was the fastest growing mānuka honey brand in North America.

Revenue in Australia and New Zealand increased by 7 per cent.

Given ongoing disruption to global supply chains, Comvita decided to increase inventory during the period, which had a corresponding negative impact on net debt.

Inventory is expected to stay at similar levels to this year's close throughout 2023.

Comvita said it stood by its view that optimum inventory levels would be about $85m by 2025.

The company is forecasting double digit earnings growth in 2023, with a strong bias to the second half.