Comvita - CVT

[Shareguy]

Yes an update would be good. At least the stars will be getting some free honey. Shame some of them have no idea where NZ is

https://www.nzherald.co.nz/entertain...R2GZI4YLMG5TU/

[Sideshow Bob]

Comvita’s resilience despite global supply chain disruption - NZX, New Zealand’s Exchange

Given the significant amount of market commentary regarding the ongoing impact of global supply chain disruption and the effect of inflation on performance, Comvita is pleased to give an update on its trading performance to the end of April.

In the 10 months to the end of April Comvita reported an unaudited EBITDA of $23.9M (c.93% of FY21 full year actuals) and is still forecasting to deliver in line with its guidance of EBITDA $27-$30M for the full year ending June 2022. Unaudited operating profit to the end of April increased by 29% versus PCP. It is forecasted that any impacts of continued supply chain disruption due to Mainland China lockdowns will be manageable. Given that Hong Kong was previously locked down and suffered from supply chain disruption, Comvita is very pleased to report that demand in its Hong Kong SAR subsidiary is strong and that underlying demand has returned to pre Covid levels. This gives Comvita confidence that the impact of any further supply chain disruption in Mainland China will also be temporary. Group Inventory has been increased in order to maintain service levels to markets.

Inflationary pressures are modest and are not impacting current performance additionally, given the high share of digital sales and its premium FMCG positioning, Comvita is well placed to pass on any price increases as and when they occur.

Commenting David Banfield, Group CEO stated “Two and a half years ago we set out our plan to build long term resilience and growth at Comvita. We are really pleased with the progress we are making despite material supply disruption in China and around the world. Our ability to mitigate supply chain disruption and offset inflationary pressure proves that we are on the right track. The team and I remain confident in our ability to continue to deliver results befitting the global market leader and set us up to deliver our short-term goals and most importantly our longer term 2025 strategic plan. We look forward to updating the market on our full year performance after our financial year closes in June”.

Ends.

[winner69]

Announcement -- that's a big relief

Good on David for keeping us updated

[Shareguy]

Lots to like. Guidance maintained. Costs importantly kept under control. Ability to pass on price increases. Little impact with Chinese issues .Has not traded on such low multiples for many years. Estimated eps forecast fy22 $.17 to $.19

[BlackPeter]

Lots to like. Guidance maintained. Costs importantly kept under control. Ability to pass on price increases. Little impact with Chinese issues .Has not traded on such low multiples for many years. Estimated eps forecast fy22 $.17 to $.19

Hmm - that's at todays SP still a PE of 17.7 ... does not sound that cheap to me for a cyclical agricultural one trick pony with plenty of macroeconomic risks attached.

Which part exactly did you like?

[Monarch]

What a timely announcement. I sold out of this on Tuesday at break even. Oh well. Does unsold stock count towards ebitda? I recall a build up in inventory at last results, is ebitda being driven by unrealised sales?

[Shareguy]

Hmm - that's at todays SP still a PE of 17.7 ... does not sound that cheap to me for a cyclical agricultural one trick pony with plenty of macroeconomic risks attached.

Which part exactly did you like?

There has been concerns that supply disruptions would have a major impact, which is not the case.

Also. Inflationary pressures are modest and are not impacting current performance additionally, given the high share of digital sales and its premium FMCG positioning, Comvita is well placed to pass on any price increases as and when they occur.

Yes Pe is high but not when you look at historical and the potential ….

[BlackPeter]

There has been concerns that supply disruptions would have a major impact, which is not the case.

Also. Inflationary pressures are modest and are not impacting current performance additionally, given the high share of digital sales and its premium FMCG positioning, Comvita is well placed to pass on any price increases as and when they occur.

Yes Pe is high but not when you look at historical and the potential ….

Looks like the markt is currently just re-rating "potential". Look at companies like e.g. XRO or FPH. I know, both of them are not in the honey industry, but growth is growth and nothing else justifies a premium over standard PE ...

[Shareguy]

Looks like the markt is currently just re-rating "potential". Look at companies like e.g. XRO or FPH. I know, both of them are not in the honey industry, but growth is growth and nothing else justifies a premium over standard PE ...

Can see your point however Xero and Fph are being punished with profit going backwards. CVT saying 29 percent growth in profit versus pcp.

[BlackPeter]

Can see your point however Xero and Fph are being punished with profit going backwards. CVT saying 29 percent growth in profit versus pcp.

Well yes, they turned a big loss in 2019 into a smaller loss in 2020 and a quite mediocre profit (14 cts/share) in 2021. Average EPS over the last 9 years would be 11 cents per share. Not really exciting, isn't it?

Sure - if you do a linear extrapolation over only the last three years than the future must look bright. Problem is just ... Earnings CAGR over the last 9 years (since listing) is negative, CVT is one of these agricultural cyclicals with huge added geopolitical risks (China market) and it is already in the upper earning quadarants (20 cents predicted this year vs 11 cents average)

Anyway ... sure - they might be good for another hype peak, but than one could as well trade crypto or lotto tickets.