Comvita - CVT

**Catalyst** · 09-12-2011, 01:27 PM

Looks like the company's hard-nosed response has scared off any likelihood of a higher bid, which is what we all were hoping for.

I do agree with the company, though, that $2.50 was a joke. PE of 10.0x FY12 forecast NPAT of around $7.5m and EV/EBITDA multiple of 6.3x (assuming EBITDA of $14.5m and $17 net debt).

I still think that CVT should be trading on higher multiples then those above. Either the market is saying the company's forecast earnings are optimistic/unsustainable or the market is waiting for further proof that CVT can achieve those numbers. I hope it's the latter, in which case CVT should rerate up (once the short-term traders have exited) over the coming year.

**Catalyst** · 26-01-2012, 12:25 PM

A couple of buy signals triggered recently, one being director Rob Tait buying a handful of CVT shares over the past week around the $2.50 mark. Last time Tait loaded up in August last year, it was followed by a profit upgrade and takeover announcement a month or so later!

Tait's recent buying suggests CVT is trading alright and on target to meet their $7.3m+ NPAT forecast for the y/e 31 March 2012. If the company achieves that, it is currently trading on a PE of around 10.5x and EV/EBITDA of around 6.5x (based on current $2.60 bid price).

**sharer** · 26-01-2012, 02:10 PM

Very encouraging that their patent in the UK for the very profitable wound dressing products has been reinstated, overturning earlier court.
I'm now inclined to advise our Trust to re-enter cautiously, longer term prospects looking good again. Main negative i see is the possibility Cerebos or others might
pursue previous threats to set up competing businesses.

**golden city** · 26-01-2012, 05:32 PM

hopefully will be over 3 bucks soon..

**golden city** · 27-01-2012, 02:45 PM

prices back up again.., but just lacking of volumes..., management is not going to miss this forecast...because they don't want to kill them selves

**Catalyst** · 21-05-2012, 09:01 PM

CVT's profit result is due out on Wednesday. I notice the shares have slowly been accumulated over the past couple of months, so that indicates the $7.3m+ profit forecast should be met. The recent drop in the NZ$ should also be helping their bottom line.

**Catalyst** · 23-05-2012, 10:25 AM

Wow, NPAT of $8.2m. Commentary read pretty good for more growth too.

At current $3.00 share price, the historical metrics look undemanding:
PE = $3.00 / ($8.2m / 28.5m shares) = 10.4x
EV/EBITDA = ($3.00 x 28.5m shares + 13m net debt) / $15.5m EBITDA = 6.4x (excl $12m Derma investment)
Gross yield = 14c / 300c / 0.72 = 6.5%

**sharer** · 23-05-2012, 05:15 PM

Very positive results. Good increase in div + confidence to lift payout fraction for ensuing years.
The strong gain in the medical product area, where they seem to have strong patents, is also very encouraging.
Also continuing sound investments in trees/bees/processing as well as marketing channels, all seems favorable for a longterm holder.
Then besides the honey they have that other olive based business & all the healtheries. Seems to have all come together very well.
Here's hoping all the good news does not encourage Cerebos or others to try horning in on their business plans.