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Soaring Aussie sales lift Comvita profit

NZN 9/05/2016 By Tina Morrison

Comvita boosted 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 in the 12 months ended March 31, from $10.2m the year earlier, the Te Puke-based company said. That's ahead of its November forecast for profit of $15m-$17m. Its shares rose 2.1 per cent to $12.25.

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."

In New Zealand, sales slipped by $200,000 to $48m although profitability rose as Comvita moved its manuka honey products away from lower-margin supermarket outlets and into higher margin tourism outlets.

"We were getting quite a lot of people going in and buying honey on deals and wholesaling it to Asia and so for us grocery was a lower margin business, so we simply diverted that honey as part of a global network into more profitable channels," Mr Coulter said.

He said the company's store at Auckland International Airport was benefiting from a record influx of Chinese tourists.

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