Big leadership rejig for mānuka honey export leader Comvita after poor FY24 result

Mānuka honey exporter Comvita is to get a new chair and senior leadership after a "confronting" FY24 financial result. Photo / NZME

Mānuka honey exporter Comvita has announced a major leadership shake-up as it struggles to overcome a slump in China and Asia market sales.

The NZX-listed company in a statement said it was resetting its business strategy and believed a different focus for leadership was required on considering how best to optimise the skills and capability available to it.

Effective from August 31, David Banfield would resign as chief executive and managing director and become a project-based strategic adviser to the Comvita board.

Brett Hewlett would step down as a director and chairman to become acting chief executive.

Bridget Coates would be the new board chair, and Mike Sang will become the new chair of the audit and risk committee.

The board would be cut from eight directors to six, with the majority independent directors.

Comvita co-founder Alan Bougen would act in an advisory role as brand ambassador.

Current board member Brett Hewlett said the company’s “extremely poor” FY24 financial result had been confronting for the board and shareholders.

New Zealand’s biggest mānuka honey exporter reported a net loss of $16.8 million, subject to what it said was an “impairment adjustment yet to be quantified”, compared with $13.1m profit in 2023.

The company at the time said trading conditions in China caused continued weakness in the fourth quarter, including knock-on effects from this slow-down to the rest of Asia, so 2024 results were below the previous guidance ranges.

Hewlett said the leadership had started the 2024 financial year encouraged by the resilience of sales and earnings growth that the company had shown through the challenging 2020-2023 years.

“For the past three years we have invested in both demand and supply capability in anticipation that this positive trend would continue towards a full recovery by 2025. The full extent of the impact of the global economic slowdown on our sales decline during FY24 and the resultant effect on profits and share price has been confronting for the board and shareholders.

“Faced with an extremely poor FY24 financial result and the slower than anticipated recovery in global demand, we are obliged to pause several longer-term investment strategies and take a more cautious approach to deploying capital and resources, while implementing a sharper focus on a number of immediate value opportunities.”

New chair Coates joined Comvita in September 2021 as an independent director, serving on the audit and risk and safety and performance committees. She chairs Comvita’s investment committee.

New Comvita chair Bridget Coates.

Her background is in capital markets, where she has had a range of governance roles including the New Zealand Superannuation Fund, the Reserve Bank of New Zealand and the Fonterra sustainability panel. Coates is chair of the Centre for Sustainable Finance and has been involved in food and beverage business in the US market, based on their New Zealand provenance.

Banfield joined Comvita as chief executive in January 2020.

In FY23 Comvita reported all-time record revenue of $234m, record ebitda earnings of $34m, record gross margin of 60% and the company was awarded Deloitte 200 best growth strategy for 2023.

Banfield said he had decided to step down due to the requirement for a longer-term commitment to see through a strategic reset and new growth path.

As a strategic adviser, Banfield would support the board on short- to medium-term strategies for further building revenue and optimising distribution models in key global markets.

“I am disappointed to leave at a time when our performance over the last year has been weak, impacted by the slowdown in our biggest market – China. As a believer in a performance culture, I take ultimate responsibility for this result but have a real belief that as conditions improve, the investments we have made will help return us to profitable growth in the near future,” Banfield said in the statement.

Outgoing chair Hewlett has been in senior leadership roles for Comvita for the past 20 years.

He joined the company in 2005 as chief executive, leading the exporter through a programme of significant growth and transformational change through to 2015. He returned to Comvita in 2017 as an independent director.

At the end of FY19, Hewlett was appointed executive director to lead a strategic review, becoming chair in January 2020.

In his new role as acting CEO, he would focus on cost reduction, organisational resilience, driving bottom line growth and restoring shareholder value, the statement said.

Mike Sang is an independent director and member of the audit and risk committee. When director Julia Hoare steps down at the end of this month, he will become this committee’s chair.

Alan Bougen and Claude Stratford founded Comvita in 1975. It has grown to be a global business with more than 90% of revenue derived from 13 offshore markets.