Record First Half Earnings At Comvita

§ Record H1 operating profit $7.2m, +39.4% versus PCP (+2.0m)

§ Record H1 EBITDA $12.1m, +14.1% versus PCP (+$1.5m)

Double digit top and bottom-line growth in focus growth markets, China and North America

Double digit top and bottom-line growth in Mānuka honey product category

Double digit top and bottom-line growth Comvita.com (D2C)

§ Revenue growth +6.1% despite significant Covid headwinds

§ Gross profit (GP) +760 bps to 56.6%

§ Marketing investment +$2.3m or +21% as long-term brand building activity continued

§ Fully imputed interim dividend of 2.5 cps declared

Comvita (NZX:CVT) today announced record first half earnings (operating profit and EBITDA) for the six-month period ending 31 December 2021. Operating profit increased by 39.4% to $7.2m and EBITDA improved to $12.1m vs $10.6m in the PCP, +14.1% vs PCP. Net profit after tax (NPAT) increased by 1% due to the high effective tax rate of 40.5% in this period, caused by non-deductible expense including M&A costs (full year effective tax rate is expected to normalise). Net profit before tax increased by 32.8% vs PCP.

Comvita’s FOCUS strategy continued to perform strongly with double digit top and bottom-line growth reported in its focus growth markets of China and North America along with market share growth in each territory. Total revenue increased by 6.1% (6.5% in constant currency) despite material Covid related headwinds in a number of markets. In addition, Comvita reported double digit top and bottom-line growth in its core Mānuka honey category and in its direct to consumer (owned) digital channels.

The Directors were pleased to resume interim dividend payments and declared a fully imputed interim dividend of 2.5 cps.

Gross profit improved by 760 basis points (bps) to 56.5% as its focus on core markets, products and channels continued to deliver results. Comvita increased its long-term brand investment by 2.2m within this result as it continued to engage with discerning consumers around the world. 

Comvita reaffirmed its confidence in its ability to deliver against its 2025 business model (60:15:20) that is designed to deliver a gross profit of at least 60%, 15% marketing investment to sales and 20% EBITDA target by 2025. In addition, Comvita highlighted the cash generative nature of its plan and signaled its intent to re-invest cash in organic growth initiatives, consumer facing strategic partnerships and M&A activity designed to start consolidation of the highly fragmented Mānuka honey market.

Net debt increased by $12.4m on last year and $21.7m since 30 June 21, primarily due to increasing inventory to offset global supply chain disruption and a $5m investment in its new joint venture in North America.

Commenting on the performance, Comvita Chairman, Brett Hewlett, said “We are delighted to announce record first half earnings at Comvita against a very strong PCP and despite continuing material Covid related headwinds. Our FOCUS business model, control of costs, investment in brand and excellent execution from a highly capable team, gives us confidence that we are on track to deliver guidance in FY22 and more importantly on track to deliver our 2025 plan. Your Board are pleased to declare a fully imputed dividend of 2.5 cps in this interim period, highlighting our confidence in the momentum we see within the business.“

Group CEO, David Banfield, says “This is another important step in delivering on our transformative plan at Comvita and setting us up for success for the long term. We see real momentum in our performance and are delighted to be able to report good revenue growth and record first half earnings despite Covid headwinds. Our performance has been underpinned by material improvement in gross margin, double digit growth in our focus growth markets of China and North America, double digit growth in Mānuka honey and in our D2C channels. I am extremely proud of the way the team have responded and want to recognise the significant effort and commitment that has gone in to deliver the results that we share today. There are many additional elements going on behind the scenes to set us up for the long term, however, for now we return to focus on H2 delivery and FY23 planning.”

“This record operating profit growth of 39.4% marks the fourth consecutive reporting period since I joined where we have reported earnings growth in line with Guidance and as importantly reaffirmed our strong belief that we are well positioned to deliver our 2025 plan. By sharing our 2025 goals we hope that all stakeholders are able to see that we are on track and that our investment is very much focused on long-term thinking and acting. We remain committed to pay back the support shown by the Board, the extended Comvita whānau and all our stakeholders.” concludes Banfield.

Background information

Comvita (NZX:CVT) was founded in 1974, with a purpose to heal and protect the world through the natural power of the hive. With a team of 500+ people globally, united with more than 1.6 billion bees, we are the global market leader in Mānuka honey and bee consumer goods. Seeking to understand, but never to alter, we test and verify all our bee-product ingredients are of the highest quality in our own government-recognised and accredited laboratory. We are growing industry scientificknowledge on bee welfare, Mānuka trees and the many benefits of Mānuka honey and propolis. We have pledged to be carbon neutral by 2025 and carbon positive by 2030, and we are planting more than two million native trees every year. Comvita has operations in Australia, China, North America, South East Asia, and Europe – and of course, Aotearoa New Zealand, where our bees are thriving.

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