Ann: GENERAL: CVT: Comvita Annualised Sales Surpa

• Release Date: 26/07/12 18:07
• Summary: GENERAL: CVT: Comvita Annualised Sales Surpass $100 million
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CVT
26/07/2012 16:07
GENERAL

REL: 1607 HRS Comvita Limited

GENERAL: CVT: Comvita Annualised Sales Surpass $100 million

Financial Summary: for year ended 31 March 2012
Sales $95.9m (increase of 17%)
EBITDA* $15.5m (increase of 145%)
NPAT** $8.2m
ROCE*** 14.4%
Net Debt / EBITDA 0.9
Earnings per share 29.10 cents
Total Dividends per share 14 cents

Financial Summary: for year ended 31 March 2011
Sales $82.0m
EBITDA* $6.3m
NPAT** $0.5m
ROCE*** 4.3%
Net Debt / EBITDA 3.0
Earnings per share 1.82 cents
Total Dividends per share 3 cents
*EBITDA: Earnings Before Interest, Tax, Depreciation and Amortisation
**NPAT: Net Profit After Tax
***ROCE: Return on Capital Employed

Global natural health and beauty products company Comvita announced
annualised sales had surpassed $100 million for the first time in the
company's history, reflecting the growing stature of the brand in
international markets.
At its annual general meeting in Paengaroa, Comvita chairman Neil Craig said
annualised sales for the 12 months to 30 June 2012 had reached $102 million.

"Comvita is known for quality and product integrity in health and beauty
products. Consumers reward us with a premium against other brands that lack
the testing, quality standards and product and brand innovations that are the
foundations of our success."

Mr Craig made the comments as he reported to shareholders on the results for
the year to 31 March 2012, when net profit after tax (NPAT) rose to $8.2
million on sales which grew 17% to $96 million.

Mr Craig told shareholders: "The results for the 2012 financial year
demonstrate Comvita's business model is delivering. The business is seeing
significant operating leverage from the infrastructure put in place over the
last six years."

"We have control of channels to market from raw material supply through to
the consumer and our ongoing product innovation is based on in-house research
and development, rather than a whole range of 'me too' commodity type
products."

Other Achievements during year ending March 2012
o Successful defense of unwelcome takeover bid
o Globally, Medihoney sales growing by approximately 38% p.a
o Normalised, Net Earnings (NPAT) grew by 136%

Supply Chain
o New, state-of-the-art medical honey extraction facility
o 50% increase in the number of beehives
o Acquisition of Waikato-based apiary business
o Increased olive leaf production capacity

Asia
o Hong Kong: 20% growth in same-store sale, 54 outlets
o China: 120% increase in sales, over 400 outlets
o South Korea: fastest growing market, now with eight outlets

Australia and New Zealand
o Improved efficiency of distribution channels in Australia by transferring
to a direct selling model
o Production capacity at Paengaroa factory increased significantly

Science and Research
o Establishment of Comvita Innovation, responsible for conducting research
programs
o A total of 41 patents pending, relating to 11 different, unique innovations
in Woundcare applications.

Mr Craig said the rewards to shareholders from continued enhancement of this
business model will be increased EBIT margins, increased earnings per share
after tax and increased dividend flow from earnings increases. A consequence
of this will be a higher share price, says Mr Craig.

"While Comvita's share price had recovered significantly in the last 12
months - at a historical price-to-earnings multiple of just 11 times - it was
still cheap relative to the New Zealand market of around 15 times. At today's
share price we have a gross dividend yield of 6%. This is also significant
when considering Comvita's rapid earnings growth phase that is now underway."

With Comvita continuing to grow rapidly, Mr Craig said the challenges will be
in the areas of remaining globally competitive in the face of a perennially
strong NZ dollar, securing raw material supply as sales increase and
maintaining a strong innovation focus.

In order to meet those challenges, Comvita CEO Brett Hewlett said Comvita
will continue to spend on control and management systems, enhance our
internet selling capability and make acquisitions in honey supply and other
raw materials.

"We will also continue to research new product opportunities that fit with
the Comvita brand, which may need to be acquired as opposed to being
developed in-house."

From a balance sheet point of view, said Mr Hewlett, we are in a strong
position and have significant financial capability to make acquisitions.

"Any such acquisitions would need to be demonstrably earnings-per-share
positive."

Mr Hewlett said Comvita's local presence in-market, reputation for quality
and success in expanding our product range is ensuring strong brand awareness
and loyalty.

"We have demonstrated we can sustain this level of growth and that we can
continue to achieve operating leverage gains provided by the scale and scope
of our local and global operations. These all point to a continuing
improvement in net earnings and growth in shareholder value".

The Board of Directors thank shareholders for their support in a year when
Comvita faced a generally tough market and the unwelcome distraction of the
Cerebos takeover offer.

For further information:

Comvita Chairman
Neil Craig
021 731 509

Comvita CEO
Brett Hewlett
021 740 160

Comvita Communications
Julie Chadwick
021 510 693

About Comvita (www.comvita.co.nz)
Comvita is an international natural health and beauty products company with a
strong New Zealand heritage. We are committed to the development of
innovative natural health and wellbeing products, backed by credible
scientific research. We develop and manufacture products in the categories of
Health Care, Personal Care (Skincare and Wound Care) and Functional Foods
(Health Foods). Manuka (leptospermum) honey is at the core of the Comvita
product range and we are the largest manufacturer and marketer of this
uniquely New Zealand resource. We sell into more than 18 countries through a
network of wholesale and third-party outlets, more than 470 branded retail
outlets throughout Asia - including 400 stores in 40 cities in mainland China
and online. We have offices in New Zealand, Australia, Hong Kong, Japan,
Taiwan, South Korea and the United Kingdom
End CA:00225351 For:CVT    Type:GENERAL    Time:2012-07-26 16:07:04