Comvita - CVT

[william67]

The board hires executives to fix problems, make changes , not hires a high-paid CEO to operat a ready-made machine. you could say the machine doesn't work, but in most cases ,It is the CEO is not capable to fix it and operate it!

[Sideshow Bob]

https://www.nzx.com/announcements/410705

Comvita Limited (NZX: CVT) global market leader in Mānuka honey, Propolis and Fresh-Picked™ Olive Leaf Extract is pleased to maintain guidance of double-digit EBITDA growth (after one-off ERP costs previously disclosed) despite the extreme weather events that hit Aotearoa, New Zealand this year and report strong demand forecasts from its markets.

Comvita is pleased to confirm that despite the negative impacts on this year’s honey harvest from a series of extreme weather events its breakeven harvest model has again delivered. The breakeven model was designed to build resilience into Comvita’s Mānuka honey supply chain by ensuring that in bad weather years the Apiary supply division was able to breakeven (avoiding any negative impact to group profits) while still preserving the opportunity to benefit in good years. Despite this year’s low harvest volumes Comvita remain well placed to meet growing demand for their premium Mānuka honey products.

In addition, Comvita reaffirmed that it is fully covered by Insurance from the impacts of Cyclone Gabrielle which had such a devastating impact on Hawkes Bay. The Hawkes Bay team is now operating from a temporary base in the region. Comvita is also pleased to report that extraction has been virtually completed (90%) at one of its other facilities ensuring continuity of supply.

Finally, Comvita noted the strength of forecasts from its markets for delivery in Q4 FY23 and the initial indications of strong forecast demand continuing into Q1 FY24. Its strong demand in Q4 will impact debtors at year end though net debt is still expected to fall by c 20% from its reported level at the half year ended 31 December 2022 and inventory is expected to be materially in line with PCP as previously forecast.

David Banfield, CEO commented “One of the key aims of our Focus strategy that we launched in 2020 was to build resilience into our operating model to enable us to offset the impact of events outside our control. It’s extremely encouraging that our honey harvest model has now been proven for three consecutive years. In addition, having just returned from China and other markets I am delighted with how our business model is enabling us to win with discerning consumers around the world. We see good demand in key markets, we are gaining market share and are forecasting a record Q4 enabling us to deliver guidance in FY23 and as importantly, keep us on track to deliver our FY25 target of $50M EBITDA.”

[Rawz]

Inventory at HY23= $145.8m
Debt at HY23= $63.3m

Inventory at FY23= $132.2m (in line with pcp)
Debt at HY23= $50.6m (20% below HY)

Looks like they have done good to reduce that huge inventory load and used it all to reduce debt.

EBITDA forecast to grow 66% over next 2 years.

Not a holder but looks good ?

[Rawz]

Market cap $193m and they hold $132m worth of honey

[winner69]

Market cap $193m and they hold $132m worth of honey

Could get a new valuation metric out of this ……. Inventory X something = share price

[BlackPeter]

Market cap $193m and they hold $132m worth of honey

Well spotted. I guess the all important question is - how is the manuka honey market trending, and how reliable are honey valuations ?

I heard about people building their fortune on quicksand ... building it on honey is something new.

[winner69]

Well spotted. I guess the all important question is - how is the manuka honey market trending, and how reliable are honey valuations ?

I heard about people building their fortune on quicksand ... building it on honey is something new.

Honey stock value $1.88 per share ……NTA $2.70 share

Share price $2.80

Mean anything?

[BlackPeter]

Honey stock value $1.88 per share ……NTA $2.70 share

Share price $2.80

Mean anything?

Yes it does - no matter how you measure it, a lot of their "value" is build on storing lots of sticky stuff and hoping the market price holds (or recovers?).

[Sideshow Bob]

Market cap $193m and they hold $132m worth of honey

Would prefer if they had $132m of cash.....

At least honey never goes off!

[kiora]

They may need to build another warehouse to store their growing inventory?
Maybe with the poor harvest this year, down >50% for other bee keepers I have heard they can lower their inventory?
Not a good sign if they can't.