Comvita on target for $100m mark

by Graham Skellern | 13th November 2009

Brett HewlettNatural health products company, Comvita New Zealand, has significantly increased its global sales - and is on track to achieve the milestone of $100 million turnover within 18 months.

The Paengaroa-based manufacturer and retailer yesterday reported a 27 per cent rise in sales to $40.1 million for the six months ending September, with main markets of China, Taiwan, Australia and New Zealand remaining solid over that time.

Comvita, listed on the main NZX sharemarket, recorded a big jump in net profit to $1.62 million, from $203,000 for the previous corresponding period.

The total sales for the first six months of the last financial year was $31.65 million.

The company also reduced its net debt by $7.1 million to $23.2 million.

"It's been a lot of hard work," said Comvita chief executive, Brett Hewlett.

"We were always confident our strategy was right and now at the end of a five-year growth plan we are starting to deliver better returns and a more sustainable bottom line.

"We had to prove this to our shareholders, but I still feel there's work to be done," he said.

 Comvita is distributing its first dividend in two years - a 2c a share interim paid on December 18.

 The company, well known for its honey-based products, is expecting strong sales over the second half of the present financial year, especially since the Northern Hemisphere is moving into its winter.

There should be increased demand for its cold and cough remedies in Britain and Europe, and Comvita is expecting a similar increase in sales, taking its full-year turnover to more than $80 million by the end of March.

Comvita just needs to maintain that pace to reach its target of $100 million in 2011.

 Chairman Neil Craig said monthly sales were now at a level to provide sustained and improved profits from investment in infrastructure over the last four years and from a focus on reducing manufacturing costs.

He said Fresh Olive Leaf
Complex continued to be a
significant driver of winter sales in Australia, and in other export markets.

Comvita also lifted its overall New Zealand sales by supplying more health shops and pharmacies.

But the star performers were still China, Hong Kong and Taiwan where Comvita supplies 280 of its own retail outlets, including 40 dedicated stores.

The others are Comvita-branded areas within existing stores.

Comvita continues to market its Medihoney woundcare dressings in the United States and Britain.

Mr Hewlett said the breakthrough will occur when clinicians start applying the product as a first line of defence instead of using it as a backup when wounds don't heal properly.