February 28, 2005

Comvita Announces 2004 Profit

NZAX-listed Comvita today announced after tax earnings of $1.26 million for the year to December 2004 and payment of a fully imputed dividend of 2.1 cents per share.

While this dividend is line with projections included in the prospectus for the Company’s public offering in April last year, after tax profit is $0.32 million below the prospectus projection but ahead of the update provided to the market in November 2004.

Total revenue for the year was up 22% on last year to $27.6 million, and Earnings before interest, tax, depreciation and amortisation was up 27% on last year to $3.64 million.

Comvita chairman Bill Bracks says that while early sales of manuka honey impregnated wound dressings have been below expectations, the 2004 result was under pinned by good growth in sales of consumer products.

“the medical industry is conservative and regulatory delays had meant that sales of wound dressings were lower than projected. However, Comvita is now much closer to being able to profit from its Manuka wound dressing technology,” says Bill Bracks.

“A pleasing aspect of the result is that underlying profitability grew faster than sales. Australia, Japan, Hong Kong and the UK markets experienced good growth and the ratio of export to local sales increased from 43% to 49% as a result.

“Comvita's strategy of having its own people in offshore markets rather than working through distributors is paying off. Japan hit profitability this year, Hong Kong hit new records and Australia traded strongly. The first Comvita store opened in Shenzhen, China in December and others will follow.

“Diversity in those markets provides a broad earning base and reduced reliance on the outbound tourism market which can be subject to unpredictable international events,” he says.

Sales from recently acquired subsidiary, Bee and Herbal, have contributed to growth in the first full year since it was acquired, with UK sales of Bee and Herbal products complementing an already solid market position.

For more information contact:
Bill Bracks 021 386 974

2005 NEW ZEALAND TRADE AND ENTERPRISE EXPORT AWARDS – BAY OF PLENTY COMPANY MAKES EXPORT AWARD FINALS
  
16 June 2005 - Bay of Plenty company Comvita Ltd has today been named a finalist in the 2005 New Zealand Trade and Enterprise Export Awards after increasing annual export earnings by 47% in 2004 to $14.6 million.
 
The big increase in international revenue has been fuelled by an ambitious growth plan that has seen the company expand beyond its traditional bee products and embark on an internationalisation strategy.
 
Based in Te Puke, Comvita is one of 21 Export Award finalists from around the country. They range from a manufacturing giant earning more than $200 million in exports annually, to small, entrepreneurial software developers. The finalists will compete for eight sector-based Export Awards and prizes, with the winners to be announced at a gala dinner in Christchurch on 11 August. One of the sector winners will also be named the 2005 DHL Supreme Exporter of the Year.
 
New Zealand Trade and Enterprise CEO Tim Gibson congratulated the finalists and said they were doing an outstanding job helping to improve New Zealand’s economy.
 
“Export success is critical to lifting New Zealand into the top half of the OECD rankings. The finalists are also helping to build a culture of business enterprise in New Zealand, and helping to position New Zealand as a source of innovation.”
 
Mr Gibson said the annual NZTE Export Awards are New Zealand’s opportunity to applaud its exporting heroes and give them the recognition they deserve.
 
“The Export Awards also have a broader purpose - showcasing inspirational exporters both large and small and helping to generate others in their league.”
 
He thanked DHL, the major sponsor of the Export Awards and a long time partner of the event.
 
Comvita Ltd
 
CEO Graeme Boyd joined Comvita in 1998 and was charged with taking the firm to a new level of sophistication and growth, building on what had been achieved by the two original shareholders, one of whom had started the business in his shed in the 1970s.
 
“In six years we’ve grown from being a small private entity with two shareholders to one where we have over 700 shareholders, are publicly listed and four times the size, with annual sales of nearly $30 million and most importantly are very profitable,” says Mr Boyd. He says about 50% of sales are from direct exports and a further 25% from Asians living in New Zealand and tourists.
 
Comvita’s principal export growth strategy is to change from being an ‘exporter’ to an ‘international marketer’ of natural health products and health solutions.
 
“Anybody involved in exporting to more than one country evolves through a continuum, that at one end might have them exporting a barrel of honey to the other end where they would have a global brand with control over every aspect of the operation,” explains Mr Boyd. He says it’s an evolutionary line that Comvita consciously decided to move along.
 
“It’s taking time but it’s absolutely working and it’s enabling us to take control of our own destiny. We are progressively replacing international distribution agents with our own subsidiaries or joint ventures to get closer to our consumers. We started in Australia by taking our own marketing decisions and were so impressed by the success of that we decided to extend the strategy into Asia.
 
“Internationalisation doesn’t mean we have to have our own sales people, warehouses or logistics services in the market, but it does mean we control the price, positioning and promotion of our products.”
 
Mr Boyd says Comvita is the only New Zealand company specialising in adding value to the whole range of apiculture by-products. The company is also investing in R&D to expand into new, premium healthcare products using entirely new bulk ingredients, such as grapeseed extract  and colostrum. An in-house naturopath assists with product development. Comvita is also using company and technology acquisition to accelerate its product development capability.
 
Comvita has more than 90 staff in New Zealand and a further ten offshore in subsidiaries in Japan, Hong Kong, Australia and most recently Taiwan. It uses contract manufacturers throughout New Zealand to boost its in-house capability.
 
Future plans include establishing an office in UK within the next few years, which will be the base for its expansion into Europe. It’s also planning to grow its business in the USA. Mr Boyd says they are taking this market slowly, learning from other New Zealand companies about the challenges they encountered trying to successfully penetrate that market.
 
He’s very proud of what Comvita has achieved in recent years and says the future looks equally as promising.
 
“We’ve been enjoying in excess of 20% compound growth per annum in sales and are looking at a similar sort of growth profile in future. Exports will remain a strong driver of that growth.”
 
DHL Express General Manager, Phil Rountree, said DHL has a long and proud tradition in helping acknowledge the top echelon of exporting and entrepreneurial talent since first beginning our sponsorship of the Awards nearly a decade ago.  Given that over two thirds of this year's finalists are also DHL customers, this also provides us with an ideal opportunity to formally recognise the accomplishments of those organisations who we assist on a daily basis. We would like to congratulate all finalists for their outstanding successes which have benefited not only their organisations but also the export industry in its entirety.
 
In addition to the NZTE Export Awards, event partners Export New Zealand will present their National Emerging Exporter of the Year and the Foundation for Research, Science & Technology will present their Technology Commendations for 2005.
 
For more information please contact:
 
Graeme Boyd, Chief Executive Officer, Comvita Ltd, Ph: 07 533 1426, Email: graeme.boyd@comvita.com, www.comvita.com
 
Paul Higgins, Communications Consultant, New Zealand Trade and Enterprise.
Ph: 09 915 4224, mobile 0275 502 373, Email: paul.higgins@nzte.govt.nz
 
 
Editors Note:        
 
About the New Zealand Trade and Enterprise Export Awards:
The New Zealand Trade and Enterprise Export Awards, featuring the DHL Supreme Exporter of the Year, recognise outstanding achievement and growth by New Zealand exporters across a range of sectors. Finalists become contenders for each category Export Award and they then vie for the 2005 DHL Supreme Exporter of the Year.
 
About New Zealand Trade and Enterprise:
 
New Zealand Trade and Enterprise (NZTE) is the New Zealand government’s national economic development agency. Through its network of 48 offices worldwide, New Zealand Trade and Enterprise aims to grow New Zealand’s economy by boosting the capability of businesses and regions and facilitating their sustained and profitable participation in overseas markets.
 
www.nzte.govt.nz  or www.exportawards.co.nz 0800 555 888
 
About DHL:
With annual revenues of nearly €22 billion in 2003, DHL is the global market leader of the international express and logistics industry, specialising in providing innovative and customised solutions from a single source.  
 
DHL offers expertise in express, air and ocean freight, overland transport and logistics solutions, combined with worldwide coverage and an in-depth understanding of local markets. DHL's international network links more than 220 countries and territories worldwide.  Over 160,000 employees are dedicated to providing fast and reliable services that exceed customers' expectations.
 
DHL is 100% owned by Deutsche Post World Net.
 
About DHL in New Zealand:
DHL New Zealand employs 450 staff at ten locations.  DHL's New Zealand operation is committed to customer value, service excellence and shipment visibility.  In 2004, DHL was awarded the Contact Centre Manager of the Year by TUANZ and is Services sector winner of the CRM Contact Centre awards.   DHL is also a corporate sponsor of Surf Life Saving New Zealand, business partner of New Zealand Trade & Enterprise and supporter of Fashion Industry New Zealand.