Comvita shares soar on forecast earnings lift
Comvita shares have soared to an all time high of $5.15 after the health products company forecast a 35 per cent gain in annual earnings.
Chairman Neil Craig told the company's annual meeting that sales to the end of March 2016 should reach $180 million, up from $152.7m, and predicted earnings of $400m by 2020.
He also signalled the exit of its chief executive Brett Hewlett in March next year after 10 years at the helm.
Comvita has been boosted by strong Asian demand for manuka honey. About a third of its sales come from Asia, with about 400 stores in China driving profits.
Hewlett said when he joined Comvita it was a Bay of Plenty-based manufacturing and exporting company and totally different to what it is today.
"A highlight has been the journey towards vertical integration and establishing a retail presence in Hong Kong, Taiwan and China, and dealing straight with end use consumers," Hewlett said.
"Comvita has also become more involved with sourcing its own raw honey and getting involved in the development of manuka plants. There's been a parallel development around olive leaf," he said.
Hewlett said the company's direction had not been totally foreseen. The board had looked for someone with a knowledge of overseas markets to develop its global presence, but the move to develop its own source of supply had not been obvious.
Comvita is working towards owning 100 per cent of its raw honey supply through long-term contracts and apiary ownership.
It raised $24m last year in a rights issue to repay debt, fund its honey inventory and make further acquisitions after a three-year effort to increase direct ownership of manuka honey supply, including the purchase of Timaru-based New Zealand Honey Producers Co-operative for $12.3m last July.
Hewlett said growth was never a straight line, and at times it had been a "roller coaster ride". The global financial crisis had provided speed bumps, as had the hostile takeover bid by Cerebos in 2011.
"That was a tough year for everyone, but it taught us a lot. Cerebos offered $2.50 a share and the board with confidence were able to recommend to shareholders to reject it and they did," Hewlett said.
He said he hoped to take on director roles in the future. The first of those will be on the Comvita board, to which he will be invited within 12 months of his departure as chief executive.