Comvita - CVT

[Getty]

Looks like CVT has been stung into action today

[Not The Chosen One]

When you consider the Chinese paid $10.50 for their shares, they are going to have to takeover the company to justify their initial investment.

Absolutely. I believe they added a big chunk to their holding last year at about $4.50 a share but still well down on what it's currently trading.

I'm finally back in the black and am looking forward to some positive results come Monday like a few others here. Will also be interesting to see how the Chinese do react to these results like you said earlier.

[bull....]

on a tear , mentioned on the thread covid 19 would be good for the stock

still thinking covid will have been good for the stock , i hold

[Sideshow Bob]

Comvita transformation driving earnings improvements

24/8/2020, 8:35 amFLLYRHeadlines

Reported EBITDA $4.2M turnaround of the first half loss of ($8.8M)
Second half EBITDA of $13M
Underlying full year EBITDA* of $19.1M
Reported NPAT ($9.7M) with ($9.3M) impact of one off non-operating items
Record revenue of $196M +14.5% versus FY19
Net debt reduced to $15.5M versus $89M FY19
China and North America (focus growth markets) deliver very strong double-digit top and bottom line performance
Transformation of organisation structure complete with costs accounted for in FY20
$15M transformation programme on track

Comvita (NZX:CVT) today released its full year audited results for the year ending 30 June 2020, reporting a full year EBITDA profit of $4.2M turning around a first half loss of ($8.8M). The second half EBITDA of $13M was particularly encouraging with strong performance delivered in its focus growth markets of China and North America.

Reported NPAT showed a loss of ($9.7M) as Comvita continued its strategy to simplify and focus the business. This review has now concluded and as such, in this period there was a one-off ($9.3M) impact of non-operating items.

When allowing for the negative impact of one-off non-operating items and one-off costs underlying EBITDA increased by $19.1M, an improvement of $19.1M year on year, with 3.8%, like for like revenue growth (despite a $11M negative Covid-19 headwind in Australia and New Zealand), a 1170 basis point improvement in gross margin (12ppts) and a $1.9M reduction in operating expense. Second half underlying EBITDA performance was particularly strong at $18.4M.

Revenue increased to a record $196M improved by 14.5% on the PCP** with the newly integrated China market recording revenue growth (like for like) of 10.9% and an improvement in net contribution of 60% despite increasing marketing investment by $1.9M. Similarly, Comvita recorded very strong growth in North America with revenue growth of 66% and net contribution growth of 196% again despite increasing long term marketing investment.

In order to increase organisational resilience and strengthen its balance sheet, Comvita completed a $50M gross capital raise in June 2020 with strong support from both retail and institutional investors. Net debt finished the year at $15.5M as a result of the capital raise and due to good internal management of cashflows and working capital (inventory reduced by $19.5M versus June 2019).

Brett Hewlett Chair commented “I am greatly encouraged by the turnaround we are seeing in our performance. We have made significant changes to the business to set ourselves up for long term profitable growth and have seen this start to materialise in bottom line improvements in the second half. As I stated at our Annual Shareholder Meeting in October, the Board and management team are totally focused on delivering the long term potential that we know Comvita offers. David and his new leadership team have worked tirelessly to reset and transform the business and are now totally focused on delivering a rebound in FY21 while setting us up for longer term success.”

Group CEO David Banfield added, “I am so proud of the way the team has responded to the many changes and challenges that have presented themselves since I started back in January. The whole team stepped up when Comvita needed them and helped to deliver the strong second half performance that we release today. Our Apiary, Olive, manufacturing, logistics and quality teams excelled when many of us were working from home, delivering record productivity and quality and our in-market teams kept supplying our loyal consumers around the world. In addition, with organisational changes throughout the company I can only marvel at the way individual people whose roles were affected reacted. Having made these tough decisions, it’s now our role to deliver strong performance in FY21 and beyond.”
$15M transformation plan on track

Comvita announced its $15M transformation plan to the market in February and is pleased to report very strong progress so far delivering a 11.7ppts improvement in gross margin versus FY19 and a 6ppts improvement since December. Comvita expects to see a further improvement of 150 basis points in gross margin by the end of FY21 as productivity improvements continue. In addition, Comvita has reduced underlying fixed costs by $1.9M as at the end of FY20 and expects an additional $2.5M benefit in FY21.
Building a Better Business

– Stabilise results, transform the organisation and deliver long term resilience and growth
During the capital raise Comvita shared its three-part plan to stabilise results, transform the organisation and build long term resilience and growth. Good progress has been delivered on these goals in the second half and we are pleased to provide an update.

Stabilise results
During FY20 Comvita faced material challenges to its performance in New Zealand and Australia as a result of its airport, retail and daigou business being disrupted by Covid-19, this created an $11M impact on revenue and associated margin in AU/NZ in the second half (included in these results). Extra effort and long-term emphasis are now being placed to ensure Comvita’s world leading honey (Mānuka and others) are available for consumption by discerning consumers in its home markets with the aim of being number one or two brand in New Zealand.

Comvita delivered double digit growth in Japan, Korea, South East Asia, CBEC and EMEA in addition to the strong performance delivered in North America and China. Margin performance was particularly encouraging with Comvita delivering its highest % gross margin in over six years. Comvita also commenced the work to reduce its SKU count by 30% (200 products) again helping to free up cash and paydown debt. Comvita continued to focus on getting fundamentals right with extra emphasis on demand planning and working capital management, net debt finished the year at $15.5M a reduction of $73.5M year on year with inventory reduced from $132M to $113M as these process improvements delivered. Longer term Comvita has an inventory target of $70M as it moves towards its zero long term debt target. In H2 FY20 Comvita reported six consecutive profitable months.
Transformed organisation

Comvita completed its organisation changes by 30 June, removing management layers, simplifying structures and increasing speed of decision making and action throughout the organisation while delivering a significant reduction in headcount (90 positions). Significant work was completed to clarify roles and responsibilities between Markets and Paengaroa (Market Support Centre), removing back office duplication throughout the organisation without impacting customer facing roles. In addition, Comvita completed its new leadership team structure with only one role left to fill. Finally, Comvita developed its new honey harvest model reducing risk in FY21, ensuring break even in the event of a poor harvest but still able to generate upside benefits in good harvest periods.

Comvita also completed its strategic review of joint ventures and partnerships outside core operations. This strategy to simplify the business and write down underperforming or overvalued assets resulted in a write down of $9.3M within these results.
Long term resilience and growth

Comvita designated its China and US markets as its focus growth markets for the next five years and has seen excellent performance in each. In China (excluding Hong Kong) Comvita delivered 10.9% top line growth and was again number one brand in the crucial 11/11, 12/12 and 618 periods. Comvita continued its focus on long term growth by investing an extra $1.9M in marketing over this period. Despite this increased marketing investment Comvita generated good operating leverage and delivered a 60% increase in net contribution.

Comvita also performed strongly in North America with revenue growth of 66% and bottom line growth of 196% with online sales growing by 44%. Distribution was increased by 1000 stores in FY20 as new national distribution came online. In addition, we have agreed a further extension with 1500+ new distribution points with one major outlet commencing in Q1 FY21. Marketing investment was increased again as we focused on delivering sell through and long term growth in North America.
A key part of building long term resilience and growth was the recapitalisation of the business and agreement of new terms with our banking partner Westpac, both of which were completed in June 2020. The raise was strongly supported by existing shareholders and institutions. The proceeds raised were used to pay down debt and ensure that the business sole focus is on delivery of results through FY21 and beyond.

Finally, a considerable amount of work was completed on the Comvita five-year plan with an emphasis on profitable growth and delivering a clear path to the 2025 target of 20% EBITDA as a key foundation for Building a Better Business at Comvita.
David Banfield Group CEO added “The new leadership team and I are totally focused on delivering a rebound in performance in FY21 and to creating the foundations for longer term success. There is much we still need to do to realise the true potential of Comvita, but we are absolutely committed to pay back the support shown by the extended Comvita whānau and our shareholders. We look forward to updating shareholders of further progress at our Annual Shareholder Meeting on the 22 October 2020.
David Banfield Brett Hewlett

On behalf of the Board of Directors
For further information
Comvita CEO, David Banfield, 021 041 5630

Background information
About Comvita (www.comvita.co.nz (http://www.comvita.co.nz))

Comvita (NZX:CVT) was founded in 1974 and is the pioneer and global market leader of the Mānuka honey category. Comvita is committed to the long term development of Mānuka and Bee products backed by unrivalled scientific knowhow. Comvita recently announced its sponsorship of the NZ pavilion at the World Expo in Dubai focusing on Kaitiakitanga (guardianship and protection of the planet).
*EBITDA: earnings before interest, tax, depreciation and amortisation and EBITDA operating is adjusted for non-operating items. EBITDA and NPAT, operating and underlying are non-GAAP measures. We monitor these as a key performance indicator and believe it assists investors in assessing the performance of the core operations of our business.
**Previous corresponding period

[winner69]

Pretty amazing number eh Bob

Annualise the second half results and wow its even more amazing

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/358490/329029.pdf

[bull....]

back to recent highs of $5 in no time

[Sideshow Bob]

Pretty amazing number eh Bob

Annualise the second half results and wow its even more amazing

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/358490/329029.pdf

A good turnaround, but also having a massive tailwind.

[bull....]

did you know the current decline from recent highs of 4.60 odd to recent lows around 2.6 - 2.70 found support at the 61.8% retracement level a factor which confirms the change of long term trend from bear to new bull.

[Shareguy]

Outstanding turn around 2nd half. Confirms my bullish expectations that going forward this stock will significantly increase. Unfortunately for New Zealand I think it will be a prime takeover target.

[pg0220]

Nice. Soaked my feet at the end of the last Friday. Looked into the past reports further during the weekend and was planning to buy more today thinking the announcement date was tomorrow........... Anyway seems the company is heading into a right direction again and there is a great potential for SP to recover back to its previous range...

[Balance]

https://www.stuff.co.nz/business/industries/122539855/comvita-makes-90-staff-redundant-posts-97-million-full-year-loss

Less staff numbers but higher revenues & better margins - heading in the right direction.

Basic but too often, companies enjoying the adulation of the market become bloated, lazy and stagnate.

[bull....]

of course to confirm the new bull market in cvt it would need to break that recent high of 4.60 so that would be the level to watch for upside. a break of the lows at 2.70 would negate the bullish argument i reckon

[Shareguy]

At $3.50 now

[bull....]

102 buyers at 3.41 so plenty of interest

[sb9]

102 buyers at 3.41 so plenty of interest

Call it the 'sharsies syndrome" :p

[bull....]

i think dividends will start maybe when they reach there stated aim of zero debt 15m to go on that

[pg0220]

https://www.stuff.co.nz/business/industries/122539855/comvita-makes-90-staff-redundant-posts-97-million-full-year-loss

Less staff numbers but higher revenues & better margins - heading in the right direction.

Basic but too often, companies enjoying the adulation of the market become bloated, lazy and stagnate.

Hopefully the new CEO means a change in the company culture...

[winner69]

Hopefully the new CEO means a change in the company culture...

He fixed Methven after years in the doldrums

[Getty]

Looks like CVT has been stung into action today

The B's are swarming over Hive now, looking for some sweet honey money.
Some are WAXing lyrical, after COMBing so long through the propolis...

[winner69]

Share price well over 4 bucks by end of week I reckon

[Balance]

The B's are swarming over Hive now, looking for some sweet honey money.
Some are WAXing lyrical, after COMBing so long through the propolis...

Wait for the STING on those without exposure when Comvita starts paying dividends and get back into NZX50 next year? 😁

[Getty]

Yeah, there's a real BUZZ in the air, they want to get into the clover...

[Getty]

I'm just winging it...

[kerryo]

Comvita makes 90 staff redundant, posts $9.7 million full-year loss.
https://www.stuff.co.nz/business/industries/122539855/comvita-makes-90-staff-redundant-posts-97-million-fullyear-loss

[Getty]

Comvita makes 90 staff redundant, posts $9.7 million full-year loss.
https://www.stuff.co.nz/business/industries/122539855/comvita-makes-90-staff-redundant-posts-97-million-fullyear-loss

I'm beeside myself with joy at my 25% short term profit, but feel for the 90 who have been pushed out of the hive.
I hope they weren't drones..

[winner69]

I'm beeside myself with joy at my 25% short term profit, but feel for the 90 who have been pushed out of the hive.
I hope they weren't drones..

No need to be sorry for the 90 .....they were just a dispensable commodity ....and you wouldn’t be 25% up

Sort of stuff shareholders like to see

[Getty]

As at JUN 2019 staff count was 225.
90 gone is a WASP attack on the hive.
CVT wont need as many Supers...

Dr JPG.

Unemployment isn't working.

[Shareguy]

Joined the investor call this morning. Very positive, not a lot to add on what has been already advised apart from ceo saying that 2021 (7 weeks) has started well.

[sb9]

Joined the investor call this morning. Very positive, not a lot to add on what has been already advised apart from ceo saying that 2021 (7 weeks) has started well.

Waiting patiently for remainder of my order to be filled after getting 70% filled in at low point for the day, can some kind person oblige and do the needful :)

[winner69]

At least the $50m cap raise money did go to reducing debt ...and solid reduction in inventory and receivables helped

[pg0220]

At least the $50m cap raise money did go to reducing debt ...and solid reduction in inventory and receivables helped
With the reduction, they now have more money to reinvest back to business or a higher chance to reinstate dividend payment earlier...

[percy]

At least the $50m cap raise money did go to reducing debt ...and solid reduction in inventory and receivables helped

"Comvita continued to focus
on getting fundamentals right with extra emphasis on demand planning and working capital management,
net debt finished the year at $15.5M a reduction of $73.5M year on year with inventory reduced from $132M to
$113M as these process improvements delivered. Longer term Comvita has an inventory target of $70M as it
moves towards its zero long term debt target."

Therefore they target reducing inventory by another $43mil.ie from $113 mil down to $70 mil.
As "our David" does what he says he will do, we will see the $15.5 mil debt paid off, and $27.5mil left in kitty.

"All pigs loaded,and ready to fly."...........lol.

[Getty]

A lot of justifiable comment has been made of CVT's prior inventory level. but I wonder what is better/worse;
A co. that has NO inventory to sell at ANY price, and is yet to produce anything, has No family silver in the closet to peddle on the market?

[pg0220]

A lot of justifiable comment has been made of CVT's prior inventory level. but I wonder what is better/worse;
A co. that has NO inventory to sell at ANY price, and is yet to produce anything, has No family silver in the closet to peddle on the market?
I think the answer is an appropriate level of inventory. Too much inventory means the company is unable to sell them at their best quality and it will result in inventory write off as they will have to sell them at cheaper prices... When Comvita was doing well back in 2016, I think the inventory level was about 40-50m and 110m seems too much when the revenue level stays the same.... unless there is a demand that can meet it....

[Beagle]

Its been a long time between drinks since this one did any good. I would have thought with pestilence, disease, biological and other agricultural risks investors would have worked out that this is an extremely risky weather dependent stock by now.

[Cadalac123]

Its been a long time between drinks since this one did any good. I would have thought with pestilence, disease, biological and other agricultural risks investors would have worked out that this is an extremely risky weather dependent stock by now.

Not to mention it's been propped up financially by a extraordinary event and so has an "unusual benefit" rather than expense line hidden underneath this new balance sheet.

How sustainable is this shift in a post COVID environment? Who knows.

[Getty]

I think the answer is an appropriate level of inventory. Too much inventory means the company is unable to sell them at their best quality and it will result in inventory write off as they will have to sell them at cheaper prices... When Comvita was doing well back in 2016, I think the inventory level was about 40-50m and 110m seems too much when the revenue level stays the same.... unless there is a demand that can meet it....

Generally correct, but fortunately honey has an extremely long shelf life.
Apparently honey found within the Pharoah's tombs is still edible.

Anyone for some Pyramid marketing?

Dr JPG

Inventory is like an Auditor taking your statement, it can be written down...

[winner69]

Tracking a company’s Operating Cash Flow is one of the best financial analysis tools. Hard to hide things in the cash flow statement and it also gives a good indication of working capital management (stock, debtors etc)

Tracking Comvita’s Operating Cash Flow has been an fascinating exercise over the years.its shown on the chart.

When everybody was excited and pushed the share price up to 12 bucks or so it’s cash flow was shocking ...a sign that things weren’t so good and not aligned with company hype. I pointed out this and other things to beagle and others who were riding the share up to 12 bucks. I’m glad they listened to me.

Even when the share price was dropping Comvita was still not worth 8 bucks or 7 bucks or even 4 bucks.

Things have turned over the last 18 months ...and cash flows are looking much healthier. Maybe there is life in this dog after all,

Fascinating chart eh ...I’ve included mid year share price .."amazing how the market drove it up to 12 bucks ...great for traders though.

[pg0220]

Inventory is like an Auditor taking your statement, it can be written down...
Written down is the correct word, thanks :)

[Getty]

Tracking a companies Operating Cash Flow is one of the best financial analysis tools. Hard to hide things in the cash flow statement and it also gives a good indication of working capital management (stock, debtors etc)

Tracking Comvita’s Operating Cash Flow has been an fascinating exercise over the years.its shown on the chart.

When everybody was excited and pushed the share price up to 12 bucks or so it’s cash flow was shocking ...a sign that things weren’t so good and not aligned with company hype. I pointed out this and other things to beagle and others who were riding the share up to 12 bucks. I’m glad they listened to me.

Even when the share price was dropping Comvita was still not worth 8 bucks or 7 bucks or even 4 bucks.

Things have turned over the last 18 months ...and cash flows are looking much healthier. Maybe there is life in this dog after all,

Fascinating chart eh ...I’ve included mid year share price .."amazing how the market drove it up to 12 bucks ...great for traders though.

It's changing from a Red head who has been through some dark days, to a honey blonde...

[Joshuatree]

Tracking a companies Operating Cash Flow is one of the best financial analysis tools. Hard to hide things in the cash flow statement and it also gives a good indication of working capital management (stock, debtors etc)

Tracking Comvita’s Operating Cash Flow has been an fascinating exercise over the years.its shown on the chart.

When everybody was excited and pushed the share price up to 12 bucks or so it’s cash flow was shocking ...a sign that things weren’t so good and not aligned with company hype. I pointed out this and other things to beagle and others who were riding the share up to 12 bucks. I’m glad they listened to me.

Even when the share price was dropping Comvita was still not worth 8 bucks or 7 bucks or even 4 bucks.

Things have turned over the last 18 months ...and cash flows are looking much healthier. Maybe there is life in this dog after all,

Fascinating chart eh ...I’ve included mid year share price .."amazing how the market drove it up to 12 bucks ...great for traders though.

Wow that is quite a buzzare disconnect there. Thanks. Holding a few at $2.50 entry.

[Shareguy]

I see in another post elsewhere that Jardens have increased target price to $4.37. Any other broker upgrades?

[bull....]

I see in another post elsewhere that Jardens have increased target price to $4.37. Any other broker upgrades?

yep the bull upgrade to t/a level 4.60

[Sideshow Bob]

I see in another post elsewhere that Jardens have increased target price to $4.37. Any other broker upgrades?

Craigs are at $3.05. Apparently it is dated 25th of August.

[Shareguy]

Thanks for that . Craig’s have not updated research note yet, still shows forecast figures for 2020.

[Leftfield]

Tracking a company’s Operating Cash Flow is one of the best financial analysis tools.

Fascinating chart eh ...I’ve included mid year share price .."amazing how the market drove it up to 12 bucks ...great for traders though.



Thanks for posting Winner. Don't hold, but I like the turnaround story under current management.

[Getty]

I see in another post elsewhere that Jardens have increased target price to $4.37. Any other broker upgrades?

Shareclarity have a Discounted Cash Flow val of $4.27

[BlackPeter]

I see in another post elsewhere that Jardens have increased target price to $4.37. Any other broker upgrades?


Craigs are at $3.05. Apparently it is dated 25th of August.

Obviously - CVT's financial performance is (as we know from history) highly variable and weather dependent. Dry is bad, wet is bad, hot is bad and cold is bad either. Pretty pointless to predict a share price unless you know how the weather will be for the next 5 to 10 seasons (and that's the easy bit - nobody can predict when the Chinese move on to the next miracle cure against Covid :));

Well, I don't, none of the brokers does and, as we know from history - CVT management does not know either.

Anyway - good luck with these predictions.

[BlackPeter]

Just have a quick look through the financials:

Obviously - average PE (10 years back) still looks terrible at 32 (based on SP = $3.28) in combination with negative earnings CAGR.

Forward PE not much better (at 27.4, based on SP above) - looks like the analysts have not much joy either.

Liabilities to Assets (26.1%) looks really great , but if they need every year a CR to achieve this shareholders might not be happy ... well, I wouldn't.

Return on equity is negative 4.5%. I recon they are ahead of the reserve bank and train their owners already to get used to negative returns ... good people, Orr could learn from them.

After a bad 2018 2 losses following each other ... and hey, they still have 81 staff with a salary between 100k and 420k on their payroll.

Why do they need that many highly paid people to produce juicy losses ... but maybe this is the reason. I recon they made the wrong 90 people redundant?

Anyway - I think I can resist ... but good luck to holders ....

[nztx]

Just have a quick look through the financials:

Obviously - average PE (10 years back) still looks terrible at 32 (based on SP = $3.28) in combination with negative earnings CAGR.

Forward PE not much better (at 27.4, based on SP above) - looks like the analysts have not much joy either.

Liabilities to Assets (26.1%) looks really great , but if they need every year a CR to achieve this shareholders might not be happy ... well, I wouldn't.

Return on equity is negative 4.5%. I recon they are ahead of the reserve bank and train their owners already to get used to negative returns ... good people, Orr could learn from them.

After a bad 2018 2 losses following each other ... and hey, they still have 81 staff with a salary between 100k and 420k on their payroll.

Why do they need that many highly paid people to produce juicy losses ... but maybe this is the reason. I recon they made the wrong 90 people redundant?

Anyway - I think I can resist ... but good luck to holders ....


Good points there

[sb9]

Here comes the sellers in big numbers...

[Nigel]

How many of the naysayers attended the investor briefing and have an understanding of the strategic approach from the new CEO (which is already showing very positive signs)? I've heard all the negativity about past performance and the risks involved with weather etc, yet after digging in to this company in considerable detail, I am confident about Comvita is heading. Time will tell.

[sb9]

Wow, selling is just unstoppable...someone is keen to meet lower lows!

[Balance]

Wow, selling is just unstoppable...someone is keen to meet lower lows!

Don't forget that $50m worth of shares were recently issued at $2.50 - still plenty of gains to be made by those who participated in the issue.

[Getty]

Yep, once a few drones take flights of fancy, the worker bee's will soar to new heights.

[Shareguy]

Just been to my local chemist warehouse to buy some comvita umf5 only to find they have sold out. Lady said hard to keep up with demand at moment.

[jorge_telosa]

https://www.nzx.com/announcements/360147

CVT Annual Report

[Joshuatree]

"How important is the new honey harvest model that you have launched for FY21 in reducing your risks going forward?
DAVID: One of the criticisms from shareholders when I joined was the lack of predictability of results given the disproportionate impact poor harvests have had on the business historically.

We have completed substantial changes to the business and the business structure,
we emerge more focused, more agile and more resilient. We are in the process of Building a Better Business.”

]We have tried to be explicit about what constitutes a bad and a good harvest and what the financial impact will be with our recent disclosures. Our new harvest model launched for FY21 means our apiary division makes a zero contribution to group profits
if we have a bad harvest (rather than recording a loss), but its contribution can be accretive to group profits by 40–50% should we have an equivalent harvest to FY20.
We believe that this will help us significantly increase predictability of our results going forward and ensure our attention is more focused on our market performance from both a sell-in and sell-out perspective"

[Joshuatree]

Thanks jorge

Well i will hold a bit longer($2.50 entry) after reading the interviews with David and Brett etc. Davids our transformation man.

Now that you have agreed a five-year plan, how do you see the process going forward? What will be the significant outcomes that signal things are on track?DAVID: We have already communicated our plan with our shareholders to deliver a 20% EBITDA margin by FY25, and we’ll share more about our journey to that FY25 goal in due course. Having made some tough decisions regarding our operating and capital structure, the most important immediate thing is to deliver a sustainable and profitable FY21 result that will give all our stakeholders confidence we are on track.

[Shareguy]

Comvita founder says in this article from the 13/9 “sales are going through the roof”https://nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=12363040

[Balance]

Comvita founder says in this article from the 13/9 “sales are going through the roof”https://nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=12363040

Good article, Shareguy, thanks for posting.

I have noticed prices of Comvita’s honey back at a premium to other brands again in the shops. Sign that demand is indeed strong, I guess.

[tommy_d]

Wonder how long it will take for the A2 milk downgrade, largely due to daigou channels falling off a cliff, to make people realise that comvita is in the same boat. Glad I'm not holding

[Shareguy]

That was already well reported in the latest results. The prize is North America and China . I still think that the AGM next month will be positive.. Have a read of the article from the founder a few weeks ago saying the product is “flying off the shelves.“

[Balance]

Wonder how long it will take for the A2 milk downgrade, largely due to daigou channels falling off a cliff, to make people realise that comvita is in the same boat. Glad I'm not holding

ATM daigou problem is rather specific to the Victorian lockdown. Also, Comvita moved to reduce its reliance on that channel last year after witnessing its volatility.

Daigou - the very thing that made a2 Milk great - has become its Achilles heel as a result of Covid-19 lockdown restrictions in Melbourne.

‘More than $1.5 billion was at one stage wiped off a2 Milk's market capitalisation after the company said its first-half revenue would drop because level 4 restrictions in Melbourne had affected its unofficial "daigou" sales.‘

[sb9]

Not much action happening here, seems to have stuck in that range between 3.15-3.20 for a while. Wonder what the next catalyst might be for a move either way...

[Balance]

Not much action happening here, seems to have stuck in that range between 3.15-3.20 for a while. Wonder what the next catalyst might be for a move either way...

Calm before the storm.

I pick takeover as the next move.

[forest]

Calm before the storm.

I pick takeover as the next move.

What makes you think that a takeover is likely?

[macduffy]

I can't see CVT taking anybody over.

;)

[Shareguy]

I think there’s going to be some positive news at the AGM shortly, Which will result in some decent share price gains. Current price is still below the terp.

[percy]

I think there’s going to be some positive news at the AGM shortly, Which will result in some decent share price gains. Current price is still below the terp.

The agm is on the 22nd October,so not long to wait.

[Shareguy]

Good article in stuff today re China buying up our food. Looking forward to the agm on Thursday.

[sb9]

Good article in stuff today re China buying up our food. Looking forward to the agm on Thursday.

Hope ASM this arvo has got few fireworks to let off...

[Getty]

You never know, you may meet the Queen Bee, & may you get a sample of Royal Jelly.

[sb9]

10min past meeting time, no sign of presentation docs, has someone forgotten to do their job...

[Balance]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/361921/333470.pdf

Q1 trading update - positive and on track.

[sb9]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/361921/333470.pdf

Q1 trading update - positive and on track.

Q2 has a very key event which is single day 11/11, that should give good boost for their sales. All going well, hopefully we'll see $5 by year end.

[Joshuatree]

All up from here one hopes. Reads a bit like a coalition but without one disruptive partner. Two chinese proverbs let us know how important that mkt is.

As Lau Tzu the famous Chinese philosopher said, ‘New beginnings are often disguised as painful ending’.
A Chinese proverb said “A man who chases two rabbits catches neither.

Surprised they havnt mentioned the upgrades at Paengaroa, think stainless steel.

[bottomfeeder]

Company reports, company speeches are just condescending and patronising commentary to keep everyone smiling. Cost cutting exercises, getting rid of unnecessary layers of administration etc. How long has the company been in existence and they are just doing it now. OK I will give it to them these are dynamic times. Proof is in the turnover and profit. At least they have reduced debt. Its a pity it was done with our hard earned money. Why are they going to repay the wage subsidy when they return to profitability. It wasn't a loan. That guy needs to be kicked back to where he came from.

[Mel]

Company reports, company speeches are just condescending and patronising commentary to keep everyone smiling. Cost cutting exercises, getting rid of unnecessary layers of administration etc. How long has the company been in existence and they are just doing it now. OK I will give it to them these are dynamic times. Proof is in the turnover and profit. At least they have reduced debt. Its a pity it was done with our hard earned money. Why are they going to repay the wage subsidy when they return to profitability. It wasn't a loan. That guy needs to be kicked back to where he came from.
Agree that there is no basis to repay the wage subsidy, but not overly material given it was only $104k.
Discl: CVT holder

[Shareguy]

It was an upgrade of sorts with double digit growth first quarter and expenses as forecast . Very happy holder with large upside potential in my opinion.

[Balance]

Company reports, company speeches are just condescending and patronising commentary to keep everyone smiling. Cost cutting exercises, getting rid of unnecessary layers of administration etc. How long has the company been in existence and they are just doing it now. OK I will give it to them these are dynamic times. Proof is in the turnover and profit. At least they have reduced debt. Its a pity it was done with our hard earned money. Why are they going to repay the wage subsidy when they return to profitability. It wasn't a loan. That guy needs to be kicked back to where he came from.

It certainly had been a hard road and very rough ride over the last 3 years for shareholders of Comvita - company had the wrong drivers and using faulty GPS!

I do think the worse is behind the company with a better ride ahead on a smoother road - so here’s to $5 as a first stop!

[sb9]

https://www.nzherald.co.nz/business/comvita-off-to-strong-start-plans-to-pay-back-wage-subsidy/7ABJZOTMQNHU353QHP7Z3XIG6A/

Banfield said the company was focused on reducing inventory and stock-keeping units, simplifying the business and generating cash.
"I'm pleased to report a strong Q1 performance with double-digit revenue growth, strong margins, costs in line with expectations, and with brand investment to support our differentiated model," he said.

[Shareguy]

Reading all the agm notes, points to a very good result 2021. Double digit revenue growth first quarter against forecast Mid single digit. I think $5 is hopeful before Xmas but will be surprised if it’s not over $4 ..

[sb9]

Wonder how these guys fared on singles day (11/11) event, will be nice to have some update..

[Shareguy]

Nz signs Asia trade deal . Worlds largest. Should be good for CVT.

[BlackPeter]

Nz signs Asia trade deal . Worlds largest. Should be good for CVT.

Who knows ... I could not find so far any information about what is in and what is out of this trade deal. Did you?

[winner69]

Who knows ... I could not find so far any information about what is in and what is out of this trade deal. Did you?

I think it's jsut one of those feel good arrangements

Sort of rues/guidelines how countries work together

Any real benefits long time off

[Balance]

Nz signs Asia trade deal . Worlds largest. Should be good for CVT.

Will be good for all NZ companies as NZ is already one of the countries with the lowest tariffs and trade barriers in the world.

Comvita’s sp is threading water at this stage until the next update - market knows sales are going well but there is still residual concern about each summer’s honey harvest. Will take a couple of consecutive good seasons to lay market concerns at bay.

[Joshuatree]

I hope CVT is using the IOT
Technology saving millions (https://elink.clickdimensions.com/c/6/?T=Njk3MjI0NTU%3AMDItYjIwMzIwLWU5MjkzMTNjZjc1YjRlN DdiZjdjMjQ0N2MyMDY3ODU4%3AbmlnZWwuc2NvdHRAY3JhaWdz aXAuY29t%3AY29udGFjdC0zY2IyNDhkMjAxNGVlYTExYTJjMDA wNTA1NjgxMjY1Zi0yMmUwM2RmNmRkYjI0ZThhYjJjYzM2NjUwZ WRmOTQyNA%3AZmFsc2U%3AMw%3A%3AaHR0cHM6Ly90aGVzcGlu b2ZmLmNvLm56L3BhcnRuZXIvc3BhcmstaW90LzEyLTExLTIwMj AvdGhlLXRlY2hub2xvZ3ktdGhhdHMtc2F2aW5nLWJ1c2luZXNz ZXMtbWlsbGlvbnMtb2YtZG9sbGFycy8_YW1wJl9jbGRlZT1ibW xuWld3dWMyTnZkSFJBWTNKaGFXZHphWEF1WTI5dCZyZWNpcGll bnRpZD1jb250YWN0LTNjYjI0OGQyMDE0ZWVhMTFhMmMwMDA1MD U2ODEyNjVmLTIyZTAzZGY2ZGRiMjRlOGFiMmNjMzY2NTBlZGY5 NDI0JmVzaWQ9ODA1MWUxMzQtYzM2My00Y2IwLWEwNzUtN2U4Nz NiMjAzOTJk&K=qwRlebOjuadsmpC7nJ5QPA)

[Shareguy]

What a great article , thanks for posting.

[sb9]

Very positive update re 11/11 sales and general trading pattern. Could be the one to look for 2021.

[Getty]

The excitement has brought me out in hives.

[BlackPeter]

Very positive update re 11/11 sales and general trading pattern. Could be the one to look for 2021.

Absolutely - must be the time to remember that we are the country of milk and honey :):

Discl: hold CVT, SML and ATM ...

[Joshuatree]

CVT my honey pie and TRA is driving me crazy.Two very good announcements and s/p lifts. xxxx

[Nigel]

From today's announcement: (paraphrased)

- Revenue on "Single's day" improved by 17% on last year, in line with expectations
- Comvita recorded the third highest sales for any New Zealand brand across all categories during this event on Alibaba
- October was Comvita's tenth consecutive profitable month
- Interim results due February 2021

[Shareguy]

Looking good alright. At this price a takeover looks plausible in my opinion.

[Balance]

https://www.healthline.com/nutrition/how-to-select-manuka-honey

Endorsement in articles like this will not hurt Comvita.

‘When you buy manuka honey, look for the UMF certification on the label. This tells you the honey’s potency and certifies that the product is real Manuka honey.

Also, the product you’re buying is more likely to be genuine if it was made in New Zealand, such as Comvita manuka honey.’

[Shareguy]

Great article balance . Chemist Warehouse in botany out of stock again .

[bottomfeeder]

https://www.healthline.com/nutrition/how-to-select-manuka-honey

Endorsement in articles like this will not hurt Comvita.

‘When you buy manuka honey, look for the UMF certification on the label. This tells you the honey’s potency and certifies that the product is real Manuka honey.

Also, the product you’re buying is more likely to be genuine if it was made in New Zealand, such as Comvita manuka honey.’

Soon it wont be called Manuka Honey it will be "Comvita" Better brand name, with better connotations. Wont be able to be copied.

[Shareguy]

Ha ha indeed . Once the Manuka trademark appeal of the Australians has been heard (I think next year),and no doubt is confirmed again that they can’t sell honey labeled Manuka then sales will really go through the roof .

[Joshuatree]

Yes indeed. And Ive heard the plant upgrade has or is nearing completion.Sounds like alot of honey is stashed away in the latest tech temp controlled automated stainless storage tanks with efficiency improvements aplenty. Also ive never seen the countryside (in B O P for one) so lush and VERDENT ! A bumper honey season coming? Comvita can buy manuka honey off many smaller operators and use their brand to maximise far greater margins. Many bees lined up in a row here , antennae crossed the rest do too.

[Balance]

And manuka honey is starting to make its way to the Indian market.

Potentially a huge market and whilst India will never be in the same league as the China or US markets in terms of purchasing power, it all adds to the demand.

https://timesofindia.indiatimes.com/life-style/food-news/manuka-honey-everything-you-need-to-know-about-this-superfood/photostory/79310531.cms

"Rightly known as gold elixir, Manuka honey is indeed a superfood. Coming all the way from New Zealand, Manuka honey has incredible anti-bacterial and healing properties."

https://www.pinkvilla.com/lifestyle/food-travel/what-manuka-honey-here-s-why-should-be-added-your-regime-lead-healthy-life-576674

"Manuka honey is used as a natural ointment to heal any kind of wound.
This is more powerful than normal honey. Be it acne, digestion or immunity, manuka honey improves several health conditions. Here’s why you should consume it regularly and how."

[sunnysleeper11]

Yes indeed. And Ive heard the plant upgrade has or is nearing completion.Sounds like alot of honey is stashed away in the latest tech temp controlled automated stainless storage tanks with efficiency improvements aplenty. Also ive never seen the countryside (in B O P for one) so lush and VERDENT ! A bumper honey season coming? Comvita can buy manuka honey off many smaller operators and use their brand to maximise far greater margins. Many bees lined up in a row here , antennae crossed the rest do too.
La Nina - dry in the south and west, warm and wet in the north and east.
That's the forecast
but how often does the Met office get it right? that's the question

[kiora]

Hot and dry is best for Manuka nectar flow

[sb9]

Seems like a breakout today...

[tommy_d]

Soon it wont be called Manuka Honey it will be "Comvita" Better brand name, with better connotations. Wont be able to be copied.
i suspect it will be called "puriti", same reasons ;)

[tommy_d]

A bumper honey season coming?
Whispers of a pretty rubbish manuka crop from northland this year, sounds like a bit coming in around auckland though

[kiora]

Whispers of a pretty rubbish manuka crop from northland this year, sounds like a bit coming in around auckland though

Too early to know but the wet weather doesn't help

[Sideshow Bob]

Comvita advertising their Black Friday sale over the weekend, 40% across the whole site.

Pretty decent discount!

[Balance]

Comvita advertising their Black Friday sale over the weekend, 40% across the whole site.

Pretty decent discount!

40% off but you can still buy cheaper at the shops!

[Deeks]

Any reason on why the ass has fallen out today ?

[Deeks]

I take that back

[Shareguy]

Any thoughts on the season? I have heard that the northland harvest has been weak but central where comvita has plantations has been ok. I expect a great result when they report soon with demand in China continuing. Also expect huge increase in demand when Australia are no longer allowed to sell as Manuka. Thoughts please

[Balance]

Any thoughts on the season? I have heard that the northland harvest has been weak but central where comvita has plantations has been ok. I expect a great result when they report soon with demand in China continuing. Also expect huge increase in demand when Australia are no longer allowed to sell as Manuka. Thoughts please

https://www.thewanakasun.co.nz/news/14431-knifeedge-honey-prediction-local-producers.html

CEO of Apiculture New Zealand Karin Kos said: “Nationally the season has been very patchy and off to a slow start given the variable weather conditions we’ve had across the country. But we are hoping more settled weather will see production increase (note: it’s still early days as the season doesn’t finish till around the end of February.)

“Regarding honey prices, it’s too soon to see what these will be for the 20/21 season but we are expecting similar price trends to the previous couple of years.”

[Shareguy]

Great article. I’m very bullish on this stock and feel still good value. Have now got a good holding and looking forward to the upcoming results. Thanks Balance for posting that.

[Balance]

https://www.nzherald.co.nz/business/how-manuka-mania-led-to-price-crash-and-new-zealands-honey-glut/GAXCGGAVWPVYFLEJNBEUW6YT4M/

Paywalled

Good article summarising the state of the honey industry in NZ :

1. Collapse in prices of non-monoflora manuka honey,

2. Huge unsold stock of honey stored around the country,

3. Monoflora Manuka honey still has good demand and still experiencing growth

[stoploss]

https://www.wired.co.uk/article/honey-fraud-detection?utm_medium=applenews&utm_source=applenews

[dibble]

https://www.nzherald.co.nz/business/how-manuka-mania-led-to-price-crash-and-new-zealands-honey-glut/GAXCGGAVWPVYFLEJNBEUW6YT4M/

Paywalled

Good article summarising the state of the honey industry in NZ :

1. Collapse in prices of non-monoflora manuka honey,

2. Huge unsold stock of honey stored around the country,

3. Monoflora Manuka honey still has good demand and still experiencing growth


From memory it also noted that, altho external medical application is powerful stuff, there is little science to suggest ingesting high grade manuka honey has any excess benefit to the immune system from normal honey. Or words to that effect. Guess there's still ample mileage in that debate between whoever the vested interests are.

[nztx]

https://www.nzherald.co.nz/business/how-manuka-mania-led-to-price-crash-and-new-zealands-honey-glut/GAXCGGAVWPVYFLEJNBEUW6YT4M/

Paywalled

Good article summarising the state of the honey industry in NZ :

1. Collapse in prices of non-monoflora manuka honey,

2. Huge unsold stock of honey stored around the country,

3. Monoflora Manuka honey still has good demand and still experiencing growth

Isn't this more of the same seen - which CVT will undoubtedly be mirroring shortly ? ;)

then will the a** fall out of things fairly badly shortly thereafter ? ;)

[Shareguy]

Two great articles. In my opinion oversupply is very seperate to Manuka story. Manuka has strong demand and once our friends across the ditch are not able to sell it as Manuka then the sky’s the limit for this stock. New ceo has a good track record. Low debt and I am expecting great things to come.

[Nigel]

I'm hearing good things about the CEO. I also sat in on the last results presentation and was very impressed with their strategy and progress.

[sb9]

I'm hearing good things about the CEO. I also sat in on the last results presentation and was very impressed with their strategy and progress.

Testing my patience on this one, has not really gone anywhere for about 6 months or so and every time it tried move upwards with an announcement it eventually get sold down to previous levels.

[percy]

We await the half year result due late February with bated breath.,.lol.

[Balance]

Testing my patience on this one, has not really gone anywhere for about 6 months or so and every time it tried move upwards with an announcement it eventually get sold down to previous levels.

Industry going through a massive transition - oversupply of honey (but not monoflora manuka honey) impacting on overall returns for industry.

Comvita’s results will be very revealing - need to demonstrate that it is a true manuka honey player & a cut above the rest.

If it does, sp will easily go above $4.00.

If it doesn't, there is downside risk to $2.50.

I am picking sp to go above $4.00.

[Lion_graf]

China are adding a ton of syrup to their honey It's that competitive advantage of manuka honey that will see them through, if it wasnt for this we would most like be seeing a SP half of what it is now.

More info on this..
https://www.wired.co.uk/article/honey-fraud-detection

[Shareguy]

Industry going through a massive transition - oversupply of honey (but not monoflora manuka honey) impacting on overall returns for industry.

Comvita’s results will be very revealing - need to demonstrate that it is a true manuka honey player & a cut above the rest.

If it does, sp will easily go above $4.00.

If it doesn't, there is downside risk to $2.50.

I am picking sp to go above $4.00.

I agree with you balance I’m expecting a good result and I think it will appreciate to over $4. Also given the good disclosure that the new CEO has been making regarding their performance I’m expecting another announcement soon regarding the December January trading.

[sb9]

Bit of exuberance this morning pushed price up to 3.48 before settling back in the arvo to finish at 3.31..

[Balance]

But if exuberance this morning pushed price up to 3.48 before settling back in the arvo to finish at 3.31..

A sign that someone knows something?

[Shareguy]

https://www.newshub.co.nz/home/rural/2021/02/dannevirke-business-selling-manuka-honey-at-harrods-for-5000-a-jar.amp.html

[sb9]

A sign that someone knows something?

Seems that way and back in action this morning....

[TheJudge]

Hi all, maiden speech so thanks. CVT fundamentals solid. On the right side of inflection point. Data suggests a positive report on the 25 Feb. $3.20 seems cheap to me. What am I missing?

[Balance]

Seems that way and back in action this morning....

Stock has fallen back to $3.20 level in the last few trading days.

Results out next week on 25 Feb.

Aggressive buyer who bought up to $3.48 has done his dash for now - we shall see if the results live up to his expectations. :p

[sb9]

Looks like this announcement from y'day has gone under the radar...

https://www.nzx.com/announcements/367664

Comvita, Global market leaders in Mānuka honey, are delighted to announce that they have formed a strategic partnership to accelerate their digital revenue and capability with London listed business THG plc.
THG is a UK-based global technology platform company, specialising in taking brands direct to consumers. It retails its own brands such as Myprotein and Lookfantastic via its end-to-end ecommerce platform THG Ingenuity, which also powers hundreds of third-party brands such as Hotel Chocolat, Antipodes Skincare, BWX Limited, and now Comvita.
Commenting, David Banfield, Group CEO Comvita said, “As part of our 5-year plan to transform performance at Comvita we shared our goal to grow our digital sales to 50% of the total group by 2025.
“The partnership with THG Ingenuity enables us to step change our online capability and ensure that our loyal fans and consumers around the world receive market-leading service and functionality that they should expect from a global category leader. We look forward to a long and mutually beneficial partnership.”
John Gallemore, CEO of THG Ingenuity, said, “Through our own brands and via THG Ingenuity, we have proven expertise in growing D2C capabilities within the FMCG sector. We are proud to be partnering with Comvita at such a crucial point in its ambitious digital transformation journey.”

[Shareguy]

Yes this has the potential to dramatically increase their sales in the UK. Thg is a very successful company and has Substantially increased sales in the brands it represents.. I’m expecting good things next week.

[Habits]

2020 AR disclosure

"Business materially impacted by loss of footfall in
tourism, retail and Daigou channels
- Mānuka honey sales impacted by Daigou and
tourism
- H2 revenue impact AU/NZ $11M"

If ATM is anything to go by.this.has the potential to badly affect 1HY 2021 revenue for CVT... I hope not:t_up:

[Balance]

2020 AR disclosure

"Business materially impacted by loss of footfall in
tourism, retail and Daigou channels
- Mānuka honey sales impacted by Daigou and
tourism
- H2 revenue impact AU/NZ $11M"

If ATM is anything to go by.this.has the potential to badly affect 1HY 2021 revenue for CVT... I hope not:t_up:

Relax.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CVT provided guidance at their AGM on 22 Oct 2020, nearly 4 months into their F21 year :

"I’m pleased to report a strong Q1 performance with double-digit revenue growth, strong margins, costs in line with expectations, and with brand investment to support our differentiated model.

Including Q1 FY21 we have now delivered nine consecutive profitable trading months. We’re absolutely focused on delivery of our FY21 result as we reduce inventory, SKU count, and look to further simplify the business and free up cash in the process.

We maintain our full year guidance:

1. Targeting 150 BPS improvement in GP

2. Targeting mid-single digit revenue growth in FY21 (20% EBITDA Benefit)

3. Underlying fixed cost reduction of NZD$4M before transformation costs of NZD$1.5M

4. Material increase in marketing investment in North America and China cNZD$6M

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~

If their results have been materially adversely impacted by anything in the last few months, they would have had to disclose by now.

CVT has already announced that they will report on 25 February next week, so you can safely assume that they are on target to a significantly improved result for H1 F21.

https://www.nzx.com/announcements/367790

Looking forward to the results and a profit upgrade.

[Shareguy]

Well said Balance . Agree it’s going to be good.

[ratkin]

2020 AR disclosure

"Business materially impacted by loss of footfall in
tourism, retail and Daigou channels
- Mānuka honey sales impacted by Daigou and
tourism
- H2 revenue impact AU/NZ $11M"

If ATM is anything to go by.this.has the potential to badly affect 1HY 2021 revenue for CVT... I hope not:t_up:

For me, longterm they still have plenty to prove. Made some shocking forays in the past (seadragon etc ) They are coming off a great honey harvest and covid tailwinds, where everything vaguely healthy is flying off the shelves. How will they do in normal/bad years. this is the question.

[Balance]

For me, longterm they still have plenty to prove. Made some shocking forays in the past (seadragon etc ) They are coming off a great honey harvest and covid tailwinds, where everything vaguely healthy is flying off the shelves. How will they do in normal/bad years. this is the question.

Agreed.

CVT was one of the darlings of the market but made one blunder after another until almost all confidence was lost in the company.

There’s a major reset going on and it will take a few years for the market to regain confidence that there is more to the company that just seasonal vagaries & hype about manuka health.

That’s why the sp is $3.20 and not $5.00.

Obviously I am confident they are on the right track with new management and the shakeout which is happening in the manuka honey industry.

[Balance]

Broker view of where CVT is and what the company needs to do:

In a note titled "Getting Back to Basics," Jarden analysts said in recent years Comvita had failed to successfully leverage the grey channel opportunity due to a lack of customer diversity and downstream margin management.

"Grey channel activity has potentially become less important as Comvita has increased focus on direct trade through Comvita China and, with this channel appearing to hold up amid Covid, likely benefiting from honey being considered an immune product," Jarden said.

"In light of this, the company needs to demonstrate better underlying performance and communicate it in a simple, uncluttered manner.

"If Comvita is able to build on recent progress and deliver, or at least show some progress, on signalled cost-out initiatives there could be upside risk to our forecasts, however expectations management has been an issue in the past," the broker said.

Comvita's goal now is to achieve profitable growth, minus seasonal slings and arrows of outrageous fortune.

[Balance]

https://www.nzherald.co.nz/business/how-honey-exporter-comvita-fared-during-the-covid-inflicted-daigou-downturn/Y52V2GUX2ZDKABNO2JVROHPD7I/

Paywalled

Scene is set for results announcement tomorrow - ‘new’ CEO sounds cautious but confident about the repositioning of Comvita away from being a weather, harvest & daigou dependent business.

Excerpt : ‘When David Banfield took over as chief executive in January last year, the goal was to produce sustainable earnings, year in and year out, irrespective of seasonal fluctuations.

The former Methven Group chief executive says that Comvita, which is due to report its first-half result on Thursday (February 25), has come a long way - the company was profitable in each of the consecutive 11 months up to and including November.

We have done an awful lot and there is an awful lot more than we will do."

[bottomfeeder]

Well this will be the test. A lot of positive news coming out over the last six months. But is there substance behind it.

[percy]

A very good result.
Had a good laugh at the David Banfield presentation.53 pages.Just like his ones at Methven.Long winded,but he is walking the walk, as well as his usual talking the talk.,.lol.

[bull....]

how much of the result was due to inventory sell down generated cashflow

[Habits]

Superb result on I think every angle

Dividends from full year but would have been good this period to reward the faithful congregation of shareholders

[Habits]

how much of the result was due to inventory sell down generated cashflow

No i think that would have been recognised under COGS... The spinoff of lower stock comes with reduced holding costs, interest expense and obsolescence. I briefly read that gross sales margin is up 1068 bps... wow

[Not The Chosen One]

Superb result on I think every angle

Dividends from full year but would have been good this period to reward the faithful congregation of shareholders

Yet the share price drops on great news while AIR have terrible news and the price increases....

[Balance]

Yet the share price drops on great news while AIR have terrible news and the price increases....

Great results so happy to add a few more before the institutional market gets interested.

Good presentation this morning too by the company.

[bottomfeeder]

Yet the share price drops on great news while AIR have terrible news and the price increases....

Its a crazy market these days. Too many pundits predicting a crash, yet RB keeping interest rates low for another two years. Big talk about 10 year bonds increasing, but only by miniscule amounts. The media just likes to promote any attention grabbing headlines.

[Habits]

Good presentation this morning too by the company.

Is it also available on demand for those who might have missed it?

[Nigel]

I was very happy with the results - a return to profitability, earnings up significantly, debt reduced significantly, dividends to resume at full year.

What sort of PE would you expect for a company such as Comvita? The numbers I'm playing with (assuming similar earnings for the next six month) suggest a share price north of $4.50.

[sb9]

I was very happy with the results - a return to profitability, earnings up significantly, debt reduced significantly, dividends to resume at full year.

What sort of PE would you expect for a company such as Comvita? The numbers I'm playing with (assuming similar earnings for the next six month) suggest a share price north of $4.50.

Despite all positive vibes, there're still some non-believers who keep pushing price down...

[Habits]

The word is that, exporting companies are noting a surge in demand for NZ products and goods including manuka honey which helps to explain the massive squeeze in dairy prices today. Consumers are turning back in volume to trusted nz brands

[Balance]

Despite all positive vibes, there're still some non-believers who keep pushing price down...

Plenty of buying lining up at $3.25 - over 100k shares to buy.

Opportunity for those who want out to get out without pushing the sp down.

[Habits]

In my opinion dont sell your comvita shares at any cost. The new environment has not been priced in and they will go strongly up in the next period ...one to two years.

[Nigel]

Is that you buying at $3.25 Balance?

[Getty]

Beeware of the sting..

[Balance]

Is that you buying at $3.25 Balance?

I am set and happy holder.

[sartis888]

I agree.

The recent half year results show that Comvita has turned the ship around. The one area that is holding them back is related to the Covid-19 pandemic.

From the recent half year results: 'The business in Australia and New Zealand has traditionally been focused on tourism, travel, Daigou ...' and 'COVID disruptions have had a material impact on revenue and earnings (particularly in Australia).'

There is no doubt that the new Covid-19 vaccines are game changers. Although it will take time, the probability that all of the factors mentioned above (tourism, travel, Daigou) will improve is high.

[sartis888]

In my opinion dont sell your comvita shares at any cost. The new environment has not been priced in and they will go strongly up in the next period ...one to two years.
I agree, see post above

[percy]

I agree.

The recent half year results show that Comvita has turned the ship around. The one area that is holding them back is related to the Covid-19 pandemic.

From the recent half year results: 'The business in Australia and New Zealand has traditionally been focused on tourism, travel, Daigou ...' and 'COVID disruptions have had a material impact on revenue and earnings (particularly in Australia).'

There is no doubt that the new Covid-19 vaccines are game changers. Although it will take time, the probability that all of the factors mentioned above (tourism, travel, Daigou) will improve is high.

Working with THG to aim for 50% of CVT's sales being online by 2025 makes good sense to me.I think online takes CVT closer to their customers,and will mean Diagou and tourism channels will be largely superseded.
We brought our last jar of Comvita Manuka Honey on line.

[Shareguy]

https://www.prnewswire.com/news-releases/comvita-launches-special-reserve-manuka-and-onehive-movement-301242593.html

[Habits]

https://www.prnewswire.com/news-releases/comvita-launches-special-reserve-manuka-and-onehive-movement-301242593.html

Excellent will get me some

[ratkin]

Excellent will get me some

600 for a jar of honey, shocking waste of money. Although I see at the airport some jars are around 2000 dollars. Ridiculous when you think about it.

[Habits]

600 for a jar of honey, shocking waste of money. Although I see at the airport some jars are around 2000 dollars. Ridiculous when you think about it.

Really as a meat and 3 veg type it was a facetious comment.... however 600 is still affordable compared to the other jars so there should br plenty of potential purchasers

[Balance]

Really as a meat and 3 veg type it was a facetious comment.... however 600 is still affordable compared to the other jars so there should br plenty of potential purchasers

$600 for 250g jar. So $2400 for 1 kg.

Akin to top grade dried Ling fish maw at $2000 per kg or top grade birds’ nest at US$10,000 per kg - one is a fish's swim bladder and the other, birds' spit!

Not for you or me but it is whatever the market is prepared to pay.

[Monarch]

Just think of the margins on that bad boy!
https://www.youtube.com/watch?v=zvu0fAdLtzg

[percy]

If there is a market for it,go for it.

[Entrep]

Someone looking to get out this week?

[Getty]

Could be the same syndrome that's hit ATM.

[Balance]

CVT to do share buyback.

[Shareguy]

I think it’s only a buyback to fill the executive share plan. Positive comments though and hopefully when they announce the results they will do a substantial buyback.. Im still very confident that this share is undervalued and CVT is going to make some serious money in the next few years. The trademark of the word manuka to New Zealand and the current issues that Australia is having with China I feel is going to be very advantageous. You only need to look at how much manuka honey Australia sells.. Disc One of my larger positions

[sb9]

Very pleasing trading update...

[percy]

Very pleasing trading update...

Yes a pleasing surprise for me.
"Strong performance in the digital channel now accounting for over 30% of group sales," augurs well for the future.
Gaining momentum.

[winner69]

Yes a pleasing surprise for me.
"Strong performance in the digital channel now accounting for over 30% of group sales," augurs well for the future.
Gaining momentum.

Now they in habit of providing upgrades there will be many more to come

Gaining momentum - sure is

[sb9]

Wonder who keeps slapping this down after the initial exuberance following every positive announcement.

[Shareguy]

Another positive anouncement. Interesting to note the increase is without the borders open in Australia and New Zealand. With the opening of borders, new relationship with THG, and trademark for NZ for the word “Manuka” one would think that this share is going to shine.

[Shareguy]

I believe Jadens have just put out a positive research note. Does anyone know thier target price and recommendation?

[percy]

https://www.scoop.co.nz/stories/BU2104/S00246/rt-hon-jacinda-ardern-opens-physical-and-virtual-comvita-wellness-lab-in-world-first-dual-launch.htm

[bottomfeeder]

https://www.scoop.co.nz/stories/BU2104/S00246/rt-hon-jacinda-ardern-opens-physical-and-virtual-comvita-wellness-lab-in-world-first-dual-launch.htm

Just hope it's not an expensive to set up and expensive to run, white elephant. Time will tell just how it will contribute to profitability.

[Rawz]

Why is CVT so overpriced? P/E of 30?

[BlackPeter]

Why is CVT so overpriced? P/E of 30?

If you believe in analyst forecasts - forward PE is roughly 21 and forward earnings CAGR is 8. Based on these forecasts SP looks about right.

Obviously - analysts are about as often wrong as they are right, but still ... there might be potential.

Market might as well see a new and quite promising management team. I guess, it doesn't work always if they hire top guns, but if it does - the sky might be the limit. If you didn't look at the story they told in the last AGM, now might be a good time to look at it.

David Banfield (CEO since a bit more than a year) turned Methven from a tired disappointer into a star performer - and the CFO (Nigel Greenwood) used to be one of the main contributors to bring SML to its previous heights. He left Synlait before they took the dive - i.e. just watch his moves - if & when he is leaving CVT, watch whether the music might stop ;).

Anyway - hold a medium sized parcel and not worried :):

[BlackPeter]

Why is CVT so overpriced? P/E of 30?

... actually - just checked the latest analyst consensus which went upwards after the recent announcement. Forward P/E (based on analyst estimates) is now below 20 and forward earnings CAGR would be 10.

Again - analysts are sometimes right and sometimes wrong, but so is everybody else when looking into the future. However - based on these numbers CVT does not appear to be too dear.

[Rawz]

... actually - just checked the latest analyst consensus which went upwards after the recent announcement. Forward P/E (based on analyst estimates) is now below 20 and forward earnings CAGR would be 10.

Again - analysts are sometimes right and sometimes wrong, but so is everybody else when looking into the future. However - based on these numbers CVT does not appear to be too dear.

Thanks BP. I appreciate the posts. I must admit I threw out the 'overpriced' line to see if any holders would come riding to CVT defense and peak my interest. Your posts did so I have done some research and have come to the conclusion CVT is a good bet.

The new strategy makes a lot of sense. Management team are stars as you say and the story makes for compelling reading, easy to get on board.

I'm going to get a small position on Tuesday :)

[winner69]

The time to get interested in CVT was when they realised that generating real cash (positive cash flows) was actually important

Always amazed me that when punters were in love with CVT and the share price headed way over 10 bucks they weren't even cash flow positive

They appear to have learnt that lesson

So probably onwards and upwards

[Rawz]

That's a cool graph W69!

[winner69]

That's a cool graph W69!

Says a lot eh

[Habits]

Says a lot eh

Says one thousand words... awesome graph!!

[Balance]

Says one thousand words... awesome graph!!

Thanks W69!

[Rawz]

The one thing I haven't figured out is why are they forecasting only mid single digit revenue growth? That's more in line of a mature company no? I thought with China and North America the growth could be double digit or at the very least high single digit?

I love the margin improvement and bottom line growth but top line is still important.. gains from cutting middle management and simplifying the business only happen once.

Is it more a honey bee or production issue?

[Balance]

The one thing I haven't figured out is why are they forecasting only mid single digit revenue growth? That's more in line of a mature company no? I thought with China and North America the growth could be double digit or at the very least high single digit?

I love the margin improvement and bottom line growth but top line is still important.. gains from cutting middle management and simplifying the business only happen once.

Is it more a honey bee or production issue?

Under promise & over deliver - as opposed to the old management’s over promise & under deliver.

[winner69]

Good they upgraded full year Operating EBITDA to between 22.5m and 25.5m

Lets assume it's going to be 25.1m

That implies H2 is going to be 13.0m (FY 25.1m less H1 12.1m)

But they said Underlying EBITDA in H220 was 18.4m

So is Operating EBITDA going backwards big time in the second half of year v pcp

I have assumed Underlying EBITDA and Operating EBITDA are the same thing - maybe that's where I am wrong

Surely not - earnings going backwards

[winner69]

Even if you use just what they call EBITDA it's not that good

H221 guidance 14m v 13m pcp -- hardly staggering stuff

And then there's 40% more shares out there than a year ago - what impact on EPS

[Balance]

Good they upgraded full year Operating EBITDA to between 22.5m and 25.5m

Lets assume it's going to be 25.1m

That implies H2 is going to be 13.0m (FY 25.1m less H1 12.1m)

But they said Underlying EBITDA in H220 was 18.4m

So is Operating EBITDA going backwards big time in the second half of year v pcp

I have assumed Underlying EBITDA and Operating EBITDA are the same thing - maybe that's where I am wrong

Surely not - earnings going backwards

Good analysis, W69.

And I agree that it is not good that EBITDA should be going backwards when company is going through transformative changes in performance.

Says to me that we will see upgrades from CVT in the next 4 months leading to FY2021 results.

[Balance]

Hmmmmm - hope CVT is not relying on Daigou recovery to drive sales & earnings growth!


https://www.stuff.co.nz/business/124863146/comvita-says-daigou-honey-trade-hurt-by-covid19-will-rebound

Border closures as a result of Covid-19 have hindered the popular daigou honey trade, where international tourists, students and other private traders ship honey to China, but mānuka honey company Comvita is confident the market will recover.

[percy]

From CVT's 13th April update.
"The increase in range is caused by ongoing strong growth in its focus growth markets of China and
North America (offsetting ANZ and Hong Kong challenges), strong performance in the digital channel
now accounting for over 30% of group sales, continued efficiencies in production and good cost control."
Also in a previous announce they stated they aim to grow online sales [digital channel] to 50% of total revenue.
So the return, if and when it happens, of the daigou channel will see better results for ANZ,so CVT are not reliant on that channel.
It will be "the bonus".

[BlackPeter]

The one thing I haven't figured out is why are they forecasting only mid single digit revenue growth? That's more in line of a mature company no? I thought with China and North America the growth could be double digit or at the very least high single digit?

I love the margin improvement and bottom line growth but top line is still important.. gains from cutting middle management and simplifying the business only happen once.

Is it more a honey bee or production issue?

Well, I do see them at current as a solid agricultural business with appropriate P/E ... and I think that the forecasts sort of see the same thing.

However - it is well possible that stock or consumer market hype or both will catch them (like it used to catch e.g. ATM and SML during their better times for selling this magic milk more people can digest without problems) and reward CVT for selling this magic Manuka honey which cures everything and is good for eternal beauty as well - best thing after ingesting deer penis or similar ..

I'd consider this hype (if it eventuates) as a bonus - and this would be when the exponential earning rates come in :):

Otherwise - with the right management - just a nice solid long term hold and dividend earner. Anyway, that's like I see it.

[winner69]

Good analysis, W69.

And I agree that it is not good that EBITDA should be going backwards when company is going through transformative changes in performance.

Says to me that we will see upgrades from CVT in the next 4 months leading to FY2021 results.

UPGRADES and more UPGRADES ... -good stuff

as Jenny Ruth proclaimed last week Comvita upgrade a milestone towards regaining credibility

[winner69]

Comvita EBITDA margin to be about 12% this year

Just imagine if they achieved EBITDA margin in excess of 25% ...like A2 do in a bad year

[Balance]

UPGRADES and more UPGRADES ... -good stuff

as Jenny Ruth proclaimed last week Comvita upgrade a milestone towards regaining credibility

'New' CEO knows how to play the upgrade story - bit by bit, always leave some in the kitty (just in case) and as we have seen market will progressively regain confidence and begin to price in PE expansion.

[Balance]

News which seem to have been missed in recent postings :

"Comvita, the global leader in UMF™ Manuka Honey, announced today it has taken the #1 spot for dollar growth in the trending Manuka Honey category over the last 52 weeks, according to January 24, 2021 SPINS data for the U.S. market. With a recent retail demand surge, Comvita has added over 1,600 Kroger locations, 750 Vitamin Shoppes and hundreds of regional natural and premium grocers to its retail roster including Fresh Thyme, Rouse's, Gelson's, and Bristol Farms. Comvita's tremendous retail expansion paired with a stronger digital footprint than any other Manuka brand has allowed the award-winning company to secure its fastest growing brand status with consumers in the increasing US market."

https://www.prnewswire.com/news-releases/comvita-ranked-fastest-growing-manuka-honey-brand-in-the-us-301269541.html

[Habits]

News which seem to have been missed in recent postings :

"Comvita, the global leader in UMF™ Manuka Honey, announced today it has taken the #1 spot for dollar growth in the trending Manuka Honey category over the last 52 weeks, according to January 24, 2021 SPINS data for the U.S. market. With a recent retail demand surge, Comvita has added over 1,600 Kroger locations, 750 Vitamin Shoppes and hundreds of regional natural and premium grocers to its retail roster including Fresh Thyme, Rouse's, Gelson's, and Bristol Farms. Comvita's tremendous retail expansion paired with a stronger digital footprint than any other Manuka brand has allowed the award-winning company to secure its fastest growing brand status with consumers in the increasing US market."

https://www.prnewswire.com/news-releases/comvita-ranked-fastest-growing-manuka-honey-brand-in-the-us-301269541.html

Thanks for the article
"Comvita, who pioneered the entire Manuka Honey category in the 1970s across New Zealand and Asia".

For a company that is largely responsible for the Manuka category they deserve the accolades. Maybe similar to kiwifruit, which in recent years has been growing strongly, but how many years did kiwifruit take from inception. Momentum building for Comvita?

[Getty]

Well, I do see them at current as a solid agricultural business with appropriate P/E ... and I think that the forecasts sort of see the same thing.

However - it is well possible that stock or consumer market hype or both will catch them (like it used to catch e.g. ATM and SML during their better times for selling this magic milk more people can digest without problems) and reward CVT for selling this magic Manuka honey which cures everything and is good for eternal beauty as well - best thing after ingesting deer penis or similar ..

I'd consider this hype (if it eventuates) as a bonus - and this would be when the exponential earning rates come in :):

Otherwise - with the right management - just a nice solid long term hold and dividend earner. Anyway, that's like I see it.

How apt a chap called BlackPeter has seen a new direction for CVT.

The unsuccessful foray into Omega oil can be replaced with a deer penis factory, for addition into Aphrodisiacal Honey.

Put some sting in ya thing.

As Balance would say, Stags will be venison that day.

That will make the share price go up.

It will give the wild Tigers a day off.

[bottomfeeder]

How apt a chap called BlackPeter has seen a new direction for CVT.

The unsuccessful foray into Omega oil can be replaced with a deer penis factory, for addition into Aphrodisiacal Honey.

Put some sting in ya thing.

As Balance would say, Stags will be venison that day.

That will make the share price go up.

It will give the wild Tigers a day off.

And this is how our money is kept safe. It stinks of desperation, as if honey is being bypassed, or has reached its saturation point. Does not bode well for the future.

[Getty]

They will be hard up.

[Getty]

The Stags will be trying hard to miss the cut off date...

[Getty]

And this is how our money is kept safe. It stinks of desperation, as if honey is being bypassed, or has reached its saturation point. Does not bode well for the future.

Yes, if CVT is to make any doe, the stags will have to get in be hind.

[Balance]

Thanks for the article
"Comvita, who pioneered the entire Manuka Honey category in the 1970s across New Zealand and Asia".

For a company that is largely responsible for the Manuka category they deserve the accolades. Maybe similar to kiwifruit, which in recent years has been growing strongly, but how many years did kiwifruit take from inception. Momentum building for Comvita?

Kiwifruit really only took off after the industry consolidated under the Zespri umbrella.

Could say the same thing about Manuka Honey - consolidation around the UMF & equivalent standardization.

Sp contiinues to consolidate - will be nice to see $4 by end of 2021. Steady as she goes, one upgrade after another.

[bull....]

is it going to break out higher , been trading in a range approx 3.1 - 3.4 for 6 mths currently at the top. if it breaks higher implies a short term target of 3.70 for the pattern

[sb9]

I'm picking another upgraded guidance sometime next month and that could catapult sp close to $4 mark and beyond depending on forward looking statements.

[Habits]

is it going to break out higher , been trading in a range approx 3.1 - 3.4 for 6 mths currently at the top. if it breaks higher implies a short term target of 3.70 for the pattern

Hi Bull... would you mind doing an analysis on KPG. I see a breakout at 1.25 from flag formation. However there is no flag pole (gap up) and the price has been in a rut/trading range for 6 months between 1.32 and 1.12. I would love to hear your thoughts. Ps I have posted this comment on the KPG page also.

[Balance]

I'm picking another upgraded guidance sometime next month and that could catapult sp close to $4 mark and beyond depending on forward looking statements.

Powering on - $3.54 now so has well and truly broken out of the recents trading range.

I am happy with $4.00 by end of 2021 with a dividend but such is the nature of the market now that it would not be surprising if the sp reaches that level sooner.

[Habits]

Powering on - $3.54 now so has well and truly broken out of the recents trading range.

I am happy with $4.00 by end of 2021 with a dividend but such is the nature of the market now that it would not be surprising if the sp reaches that level sooner.

There are very few for sale, only 18000 up to over 4 dollars

Update: now 12000 between 3.55 and 4.25 incl 7000 at 3.60.

[Balance]

There are very few for sale, only 18000 up to over 4 dollars

Update: now 12000 between 3.55 and 4.25 incl 7000 at 3.60.

Suspect the share buyback has mopped up some of the loose stock out there too.

[sb9]

Suspect the share buyback has mopped up some of the loose stock out there too.

Yep on point. Suspect combination of buy back and seller easing has caused bit of gap ups in price. Let’s see how far that lasts.

[sb9]

From their announcements, intention was to buy back a total of 400,000 stock between 01/04-14/05. So far they've acquired 225,000, got further 175,000 buy back still to go through. Guess we may see sp inching higher until that's finished.

[Shareguy]

Mānuka honey battle: New Zealand, Britain, Australia in trademark fight
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12443

In my opinion NZ should win this. If this happens will be enormous for NZ Manuka and of course the leader Comvita..

[sb9]

Nice tick up to sp today...hopefully another profit upgrade announcement not far away.

[Shareguy]

Very encouraging that the senior leadership team are committing to 3/4 of a million worth of shares. Interest payable . Don’t think it will be long to $4.00.

[ralph]

Very encouraging that the senior leadership team are committing to 3/4 of a million worth of shares. Interest payable . Don’t think it will be long to $4.00.
I agree it a strong possibility if we can keep China onside .

[Shareguy]

Yes China is important and one would think the current issues with Australia should be good for Cvt. We will know soon if New Zealand is successful in trademarking the word Manuka. If we are successful (we should be) the hundreds of millions of dollars that Australia currently sells as Manuka is likely to migrate to NZ. It should be a game changer for CVT.

[percy]

Upgrade .
https://www.nzx.com/announcements/370581

[winner69]

Upgrade .
https://www.nzx.com/announcements/370581

Good stuff

How many upgrades now percy?

[Balance]

Upgrade .
https://www.nzx.com/announcements/370581

13 April - old news?

[Balance]

https://www.nzx.com/announcements/373275

Comvita, the global market leader in Mānuka honey, is pleased to announce that its in-house honey testing laboratory has been awarded accreditation under the International Accreditation New Zealand (IANZ) Laboratory Accreditation Programme. The laboratory has also been formally recognised by the Ministry for Primary Industries (MPI) to perform honey testing under section 101 of the Animal Products Act 1999. Comvita is the first, and only, Mānuka honey company to hold this dual certification, a testament to the high quality and expertise of its laboratory services and staff.

[percy]

Good stuff

How many upgrades now percy?

Do not know,however seeing digital sales at 30% of revenue ,means they are well on their way to their target of 50%.

[Balance]

Private sales usually command a lower multiple so I would say that CVT is undervalued, given the depth and breadth of CVT vs King Honey.

https://www.nzherald.co.nz/business/sky-tv-co-founder-terry-jarvis-offloads-manuka-honey-business-to-nzx-listed-me-today-for-36m/XMBOANDPNJ7FBYAK4U2DCXSKWI/

Worthwhile making a comparative value assessment :

King Honey had revenue of $16.5m in the year to March 31 and Ebitda of $3.87m - sold for $36m.

So EBITDA multiple of 9.3 times for King Honey.

Comvita is expecting EBITDA of $22.5 to $25.5 so call it $24m

- putting the company with sp of $3.20 = market cap of $225m, & estimated debt of $11m = EBITDA multiple of 9.8X

[winner69]

Private sales usually command a lower multiple so I would say that CVT is undervalued, given the depth and breadth of CVT vs King Honey.

https://www.nzherald.co.nz/business/sky-tv-co-founder-terry-jarvis-offloads-manuka-honey-business-to-nzx-listed-me-today-for-36m/XMBOANDPNJ7FBYAK4U2DCXSKWI/

Worthwhile making a comparative value assessment :

King Honey had revenue of $16.5m in the year to March 31 and Ebitda of $3.87m - sold for $36m.

So EBITDA multiple of 9.3 times for King Honey.

Comvita is expecting EBITDA of $22.5 to $25.5 so call it $24m

- putting the company with sp of $3.20 = market cap of $225m, & estimated debt of $11m = EBITDA multiple of 9.8X

Did some comparatives as well

what truck me was King Honey ebitda margin about 10% ....Comvita about 10%

Hopefully Comvita will improve

[Balance]

Did some comparatives as well

what truck me was King Honey ebitda margin about 10% ....Comvita about 10%

Hopefully Comvita will improve

Comvita is a turnaround story so there will be plenty of margin improvements in the years ahead imo.

Short term, punters are bored with CVT's rather tight trading range.

Does need another profit upgrade or a takeover offer.

Both are likely imo.

[Marilyn Munroe]

Yes China is important and one would think the current issues with Australia should be good for Cvt. We will know soon if New Zealand is successful in trademarking the word Manuka. If we are successful (we should be) the hundreds of millions of dollars that Australia currently sells as Manuka is likely to migrate to NZ. It should be a game changer for CVT.

Walk in to a lawyers office and tell him you want to make an intectual property claim over a widely used genric name. He will be privately thinking; "Yay! I can afford that winter holiday at a luxurius resort on a tropical island now".

Or do you mean an appelation claim to block the Underarm Bowlers which are subject to intergovernmental negiotiation? These claims apply to a geographic area so any Kiwi producer would have access to the appletaion name not just CVT.

Boop boop de do
Marilyn

[Shareguy]

You’re right re-the cost of trademarking a product such as this, but In this case the New Zealand government has added substantial dollars into the pot. And yes if New Zealand is successful all producers will benefit including comvita. Think of the upside if we win this..

Have a look at these articles which I found interesting

https://amp.abc.net.au/article/ (https://amp.abc.net.au/article/100064228)

https://www.auckland.ac.nz/en/news/2019/10/30/long-road-for-maanuka-honey-trademark.html (https://www.auckland.ac.nz/en/news/2019/10/30/long-road-for-maanuka-honey-trademark.html)

[Balance]

Industry consolidation underway.

Eat or be eaten.

CVT will be in play or playing sooner or later.

https://www.afr.com/street-talk/sweet-dreams-goldman-sachs-finds-buyers-for-honey-new-zealand-20210614-p580r5

Private equity and strategic investors are back swarming around New Zealand’s lucrative manuka honey sector, preparing for the next blockbuster auction.

[mikelee]

my dad buys tons of premium honey as he really believes in its heath benefit and with bee dying around the globe I reckon NZ could do really well if it can capitalise on it

[silu]

Industry consolidation underway.

Eat or be eaten.

CVT will be in play or playing sooner or later.

https://www.afr.com/street-talk/sweet-dreams-goldman-sachs-finds-buyers-for-honey-new-zealand-20210614-p580r5

Private equity and strategic investors are back swarming around New Zealand’s lucrative manuka honey sector, preparing for the next blockbuster auction.

And Me Today purchasing King Honey seems like a shrewd decision then (discl small shareholder in MEE)

[sb9]

Industry consolidation underway.

Eat or be eaten.

CVT will be in play or playing sooner or later.

https://www.afr.com/street-talk/sweet-dreams-goldman-sachs-finds-buyers-for-honey-new-zealand-20210614-p580r5

Private equity and strategic investors are back swarming around New Zealand’s lucrative manuka honey sector, preparing for the next blockbuster auction.

Be fascinating to see who would blink first, Chinese or Europeans...

[Shareguy]

https://amp.rnz.co.nz/article/5e1ce3d9-85fb-4338-b60b-b5623688f649

[Shareguy]

its all happening

https://www.nbr.co.nz/story/manuka-honey-marketer-said-be-seeking-buyer (https://www.nbr.co.nz/story/manuka-honey-marketer-said-be-seeking-buyer)

[Balance]

Industry is overdue for rationalisation and proper consolidation - this is the nature of how industries evolve in NZ over the decades.

CVT imo is in pole position to benefit.

[Shareguy]

Nbr quote Manuka Doctor have $25 m ebitda on $60m sales Comvita are forecasting $22.5 to $25 m ebitda on $195m sales. You can look at this in various ways however CVT either have to reduce thier cost structure (which they are doing, but is it enough) or increase thier margin dramatically. If Manuka Doctor can make huge money out of Honey then big opportunity for CVT.

[tommy_d]

its all happening

https://www.nbr.co.nz/story/manuka-honey-marketer-said-be-seeking-buyer (https://www.nbr.co.nz/story/manuka-honey-marketer-said-be-seeking-buyer)
funny, there's an nbr article from february 2019 with the same premise - i think it's the one you have linked?

current story covered here, and it isn't paywalled: https://www.afr.com/street-talk/sweet-dreams-goldman-sachs-finds-buyers-for-honey-new-zealand-20210614-p580r5

[BlackPeter]

That's a nice update: https://www.nzx.com/announcements/374554



Comvita reports record breaking 618 (18th June) sales in China

...

Comvita’s total sales through the festival increased +31.0% on last year reflecting a strong growth in consumer awareness and demand for the Comvita brand, particularly given that the overall honey category sales were relatively flat year on year. Comvita also made the Tmall Top 10 brands in the healthy food category and was the leading International brand in this prestigious list reflecting the fact that Comvita is being recognised more and more as a broader lifestyle brand.

Commenting, David Banfield Group CEO said “I am delighted that our team have been able to deliver such a strong result in the second most important shopping event in China. This performance continues to offset the headwinds experienced in the ANZ Daigou market. We believe that our unique and differentiated business model, and longer-term strategy is starting to show signs of momentum and is helping us build long-term resilience.”

Glad to hear that honey sells better than milk in China ;):

[sb9]

Comvita reports record breaking 618(18 June) sales in China
Comvita is pleased to report that it was the leading brand in the category in the recently completed 618 shopping festival in China, outperforming all other Mānuka honey brands on the two leading e-commerce platforms Tmall and JD.com.
Comvita’s total sales through the festival increased +31.0% on last year reflecting a strong growth in consumer awareness and demand for the Comvita brand, particularly given that the overall honey category sales were relatively flat year on year. Comvita also made the Tmall Top 10 brands in the healthy food category and was the leading International brand in this prestigious list reflecting the fact that Comvita is being recognised more and more as a broader lifestyle brand.
Commenting, David Banfield Group CEO said “I am delighted that our team have been able to deliver such a strong result in the second most important shopping event in China. This performance continues to offset the headwinds experienced in the ANZ Daigou market. We believe that our unique and differentiated business model, and longer-term strategy is starting to show signs of momentum and is helping us build long-term resilience.”
Comvita has a unique ‘End to End’ business model with around 350 people employed in markets outside of New Zealand to ensure that Comvita is better connected to customers and consumers in market and is able to adapt at speed to meet local market changes and needs. A particular strength of this model has been evidenced in Mainland China and Asia where Comvita has been able to offset the impact of the challenges in the Daigou market in Australia and New Zealand. This model also enables the business to continue to perform strongly even with travel and tourism being so restricted.
Comvita retains its full year guidance and as previously reported intends to resume dividend payments when announcing its FY21 results.

[percy]

Encouraging has been their ability to adapt their business model successfully away from the ANZ Daigou market,which I see as making their future a lot more secure.
Pleasing noting a divie is not too far away.

[sb9]

"Dividend resumption", such a soothing tune to ears. Hopefully sp can march into new uptrend from hereon...

[winner69]

Well done Blur the Lines - great effort

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/374675/349145.pdf

[nztx]

Well done Blur the Lines - great effort

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/374675/349145.pdf

wonder how much CVT's perceived better fortunes will help MEE spinning along post-Cap-Raise in CVT's slipstream .. ? ;)

[Habits]

"Dividend resumption", such a soothing tune to ears. Hopefully sp can march into new uptrend from hereon...

Yes me too and I think it is... recent high 3.60 is next target, after that SP will move to 4.00

[TheJudge]

SP seems to be consistently hitting some sort resistance at $3.50. I wonder who would be selling at this stage? The interim financial statements are due soon.

[TheJudge]

Does anyone know when the interim financial statements are released? Last year July 17th. Thought it could be similar this year? Any other news out there?

[winner69]

Does anyone know when the interim financial statements are released? Last year July 17th. Thought it could be similar this year? Any other news out there?

I think the annoucement of June 25th (record June sales and retaining guidance) is all we will get before the year's result is announced late August

So patience needed


You never know though - they might have surprised themselves and there will be a monster upgrade ....but you would think they knew the full years result on the 25th June