Comvita off to strong start, plans to pay back wage subsidy

Comvita said it would pay back its Covid-19 wage subsidy upon returning to profitability. Photo / Hawke's Bay Today.

Manuka honey company Comvita said it had experienced a strong start to its financial year, with double-digit revenue growth in the first quarter.

The company said its gross profit margins were strong, and that its costs were in line with expectations.

The last nine consecutive trading months had been profitable, chief executive David Banfield told the company's annual meeting.

Banfield said the company was focused on reducing inventory and stock-keeping units, simplifying the business and generating cash.

"We've made a good start but there is still a long way to go," he said in speech notes prepared for the meeting.

"I'm pleased to report a strong Q1 performance with double-digit revenue growth, strong margins, costs in line with expectations, and with brand investment to support our differentiated model," he said.

"We're absolutely focused on delivery of our 2021 result as we reduce inventory, stock keeping unit count, and look to further simplify the business and free up cash in the process," he said.

The company was forced to close its retail stores and the visitors centre at Paengaroa due to Covid-19.

Comvita claimed $104,000 in wage subsidies to retain employment of retail and duty-free staff during the first Covid-19 lockdown.

The company plans to repay the wage subsidy once it returns to profit.

In his review of the year, Banfield said the first half was disappointing but that there was progress and momentum in the second half.

Comvita reported a net loss of $9.7m for the year, of which $9.3m

was from one-offs.