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Soaring Aussie sales lift Comvita profit

NZ NewswireNZ Newswire 10/05/2016 Tina Morrison

Comvita boosted its annual profit 68 per cent as Australian sales soared, overtaking New Zealand as the manuka honey company's largest market.

Profit jumped to $17.2 million, or 43.36 cents per share, in the 12 months ended March 31, from $10.2m, or 29.88 cents, the year earlier, the Te Puke-based company said in a statement. That's ahead of its November forecast for profit of $15m-to-$17m. Its shares rose 1.7 per cent to $12.20.

Comvita shares have tripled in the past year, hitting a record high $12.40 last month, on demand for products such as manuka honey and olive leaf extract.

Revenue increased 32 per cent to $202m as Australian sales jumped 62 per cent to $65m, helped by third parties buying the company's products to sell in China.

Sales to Asia rose 38 per cent, as China and Japan rose, US sales grew 66 per cent from a small base, and New Zealand and Europe slipped.

"We have grown really well in Australia and we've managed to do it without significantly increasing our cost base," chief executive Scott Coulter told BusinessDesk.

"What's happening in Australia is a lot of Asian consumers are buying products and taking them home to friends and family and we have been right at the forefront of that trend. Australia has just stepped up."

Manuka honey accounts for about half of its sales while olive leaf extract makes up about 10 per cent.

The company is changing its balance date to June 30, although it expects the 15-month operating result will likely be similar to the latest 12-month period given the June quarter is typically the quietest period due to seasonality of sales.

Comvita will pay a second interim dividend of 10 cents per share on June 24, taking the total for the 12-month period to 16 cents, ahead of 13 cents a year earlier.

A final dividend is expected to be paid in September based on the audited accounts for the period through June, it said.

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