Daily ShareChat: Comvita

Honey products company Comvita's normalised $1.6 million net profit for the year ended March was a good turnaround from the $1.4 million loss it made in the previous 15 month period, says Selwyn Blinkhorne at ABN Amro Craigs.

Although reported revenue was up 26.4% on the previous year, the company made three acquisitions totalling about $50 million in the previous period and Blinkhorne estimates excluding these sales were up about 15%.

While the results were mostly as he had expected, the company didn't declare a dividend and Blinkhorne had forecast a 2.5 cents-a-share payout.

Blinkhorne says the full impact of the 2008 acquisitions and recent cost reductions, including significant reductions in staff numbers, as the company focuses on margins, costs and working capital have yet to be reflected in its earnings.

"Our earnings forecasts anticipate further robust revenue and margin growth from new products, the impact of consumers not appearing to put health in the ‘discretionary spend' category and the benefits from a relatively fixed-cost distribution structure."
He is expecting a $3.1 million net profit in the year ending March 2010 and $4.3 million the following year.

Blinkhorne values Comvita's shares at $1.20 compared with their close on Thursday at 84 cents.

BROKER CALL:  ABN Amro Craigs rate Comvita (NZX: CVT ) as buy.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Related News:

Comvita may not increase earnings in 2014 as higher honey prices bite, Craigs says
Comvita turned to a loss in first half, remains confident of increasing annual profit
Nasdaq-listed Derma Sciences takes 7.3 percent stake in Comvita in discounted placement
Comvita FY profit falls 10 percent , beating guidance, on honey shortage, rising costs
Comvita flags 15 percent fall in FY profit as expensive honey, supply shortages prompt downgrade
Comvita buys Aussie groves to expand olive extract output
Comvita first-half earnings fall 7.4% amid short supply
Comvita buys Whanganui-based Kiwi Honey for undisclosed sum
Comvita hits 5-yr high on early results from diabetes trial
Comvita to seek deeper pool for directors' fees at AGM