Sales sweet as honey but earnings don't quite stick

Honey and bee product company Comvita yesterday posted a mixed result for the six months to June 30. Net profits were down 7 per cent but overall sales were up 26 per cent.

Total revenue increased to $18.3 million from $14.5 million for the corresponding period last year. Net profit after tax was $602,000.

While that was lower than the half-year result of a year ago, it was well ahead of budget and in line with forecasts signalled at the AGM in April, the company said.

The Bay of Plenty-based firm sells a range of products, including honey, propolis, bee pollen, royal jelly and manuka honey wound-care products.

Chief executive Brett Hewlett said the most pleasing aspect of the result was that even with considerable investment being put into skilled staff and infrastructure for future growth, ebitda (earnings before interest, tax, depreciation and amortisation) had increased 15 per cent.

He said a return to strong sales in New Zealand, a rapidly growing Hong Kong market, heightened demand in the UK and steady growth in China and Australia had continued the 2005 pattern of sales growth for Comvita.

"Looking ahead, we expect sales growth to continue at the same rate as the first half of the year and the benefits of a lower currency starting to impact positively on our result.

"This impressive start to 2006 is evidence that our five-year growth strategy is well and truly on track."

The board has declared an interim dividend of 2c share. The company has purchased a strategic stake in US-based Derma Sciences, a specialist wound-care company. The shares closed steady at $3.56.