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09-06-2013, 03:55 PM
#121
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06-09-2013, 10:41 AM
#122
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03-04-2014, 02:14 PM
#123
What was wrong with the newsletter? seemed fine to me , but stock down 5% admittedly on very low volume
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03-05-2014, 06:25 PM
#124
Yeah Right!
Back in October 2013 when Comvita announced their forecast half year loss and full year guidance, I thought "yeah right!". Management said "We remain confident of delivering full year revenue and earnings in excess of 2013. NPAT for the full year ending March 2013 was $7.4m on sales of $103.5m.". Having owned shares in this company before, I knew their track record has been patchy and I took the guidance with a grain of salt.
Comvita released it's FY14 Guidance last week. FY14 profit is expected to be $7.5m and sales are $115m. So they delivered and my skepticism was off the mark.
There are a couple of things that make the result quite solid:
1. They have faced currency headwinds since the previous guidance yet still met guidance. The company was starting to develop a track record of disappointment. I expected a continuation of poor news, I am now less skeptical of management guidance.
2. The underlying sales growth for the second half was strong (up 24%). Even stronger is the EBITDA growth of 54%. It was the best second half result in the
company's history (by a long way)
Comvita has previously highlighted the reasons for weak first half:
-seasonality
-marketing for second half
-supply issues
Supply issues should now resolved for FY15 and FY16 because:
1.Increased ownership of apiary's
2.Building up inventories
Any honey price rises in the future should be not be as painful to the bottom line as they are reaching their company-supplied honey targets.
Given the second half performance, it seems the honey supply issues have been taken care of.
Craigs(the only broker covering CVT) is targeting NPAT of $9.8mil(31.c per share) for FY15. At the current share price of $3.30, this would put CVT on a pe of around 11 for FY15.
Craigs estimates seems quite achievable. I think they could be conservative for because:
1. I expect normalisation of profits for for the first half. Therefore NPAT for 1st half should be $2.5m based on historical results
2. Given the historical growth rates, we should expect growth the the second half NPAT by around 15% giving 2H15 NPAT of $9.5 m.
So FY15 could end up being a profit of $12m (38c per share). This would put the CVT on a pe under 9 for FY15. See chart below for NPAT by half performance. Note that the last 2 years have been hampered by honey supply issues.
chart_1.png
Of course, we should get guidance from the company at the upcoming AGM. Until then, my estimates are quite speculative. Craigs currently has a target of $3.64 based on FY15 NPAT of $9.8m. I'd expect that target to increase to well over $4 if my NPAT estimates are signalled at the AGM.
Also of note, one of the directors, Robert Tait, brought back in December. He hasn't been buying since 2012 and before the honey supply issues came to light. His buying in 2012 preceded good financial results and a strong run up in the shareprice. Always good to be buying when he is also buying.
Disclaimer: HOLD CVT. This is not a recommendation to buy. Just my thoughts on the CVT.
Footnote: I notice that Craigs round their NPAT figures to the nearest million. This is a little annoying. I have had to work back from the eps figures.
EDIT: 7/9/14 - I now think the my NPAT estimate is way too bullish.
Last edited by noodles; 07-09-2014 at 10:48 PM.
No advice here. Just banter. DYOR
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03-05-2014, 06:55 PM
#125
Great post Noodles.What a massive second half..
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09-05-2014, 07:51 PM
#126
Thought I might have got some of these at $3.35 this week to top up, but gave up and paid up at $3.49.
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22-05-2014, 01:42 PM
#127
It really is a land of milk and honey
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22-05-2014, 02:11 PM
#128
Originally Posted by ratkin
It really is a land of milk and honey
Nice one mate
And tastier than oilers and miners too
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22-05-2014, 07:47 PM
#129
And more big news the day before the announcement.
https://www.nzx.com/companies/CVT/announcements/250737
Comvita just bought New Zealand Honey Limited from New Zealand Honey Producers Co-Operative Limited… subject to shareholders approval but it looks like every one is on board with it.
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23-05-2014, 10:18 PM
#130
All in the detail
After reading the Full Year report and listening to the phone conference today, I noted this key observation...
Asian NPBT dropped from $8.6mil to $4.6mill. It was explained during the phone conference that this was due the rise in the price of honey. Unlike NZ and Aus, the company was not able to pass on the price increases as they had contracts with their customers. Next year, they should be able to pass the price increases on. If CVT can return to normal profit margins in Asia, they will have a great FY15.
Also of note was their beachhead in the US. There is no letup in their growth trajectory.
Tempering this good news was that indication that the first half would follow the same pattern as last year. Hopefully the first half is not a loss.
I'm still picking 50% profit growth for FY15
Happy holder.
No advice here. Just banter. DYOR
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