News Release
August 2, 2004
Comvita Opens Branch Office In Taiwan

Export-oriented marketer of natural health products, Comvita Limited, has opened a branch office in Taiwan, the world’s second largest market for propolis, Comvita’s most lucrative export product.

The move adds to the company’s physical offshore presence in Japan, Hong Kong and Australia.

Taiwan is viewed by Comvita as a market of untapped potential for its health products. It has been exporting products there since the early 1990’s. The decision to open an office in Taiwan was made in order to further realise this potential.

Charged with the overall responsibility for the new project, Comvita’s sales and marketing manager Scott Coulter has led the move to establish the Comvita Taiwan Branch Office in Taipei.

“Marketing control by way of a subsidiary company will provide opportunities for flexibility on pricing, increased distribution and investment in marketing, as well as an improved margin,” he says. “It will also enable us to more effectively advertise and promote our products within the Taiwanese market, as well as closely partner our local distributors.”

Coulter says there’s a ready market in Taiwan for Comvita products based on New Zealand-sourced propolis which is recognised as being technically superior.

This is confirmed by Comvita’s Asia regional manager, Sam Tsoi, who is responsible for sales growth and distribution in Taiwan.

“Our Taiwan branch office now presents us with a key opportunity to achieve growth in sales to Taiwanese resident in that country following their initial exposure to the brand in New Zealand,” says Tsoi.

He refers to the large number of Taiwanese, and Asians generally, holidaying or residing in New Zealand who purchase Comvita products here.

“We have several outstanding opportunities lined up to capitalise on the brand awareness generated by our marketing activities in New Zealand.”

Tsoi says having a physical presence in Taiwan will facilitate growth and assist Comvita in developing the marketing infrastructure required within that unique market.

Comvita’s expansion into Taiwan is a continuation of a New Zealand export success story. It has won numerous export and business awards, including the 2003 New Zealand Trade & Industry Consumer products Exporter of the Year Award.

New Zealand Trade and Enterprise will provide financial assistance for the Taiwan branch office project through the Growth Services Fund. The grant will enable Comvita to advance the project and will assist with initial expenses.

The company’s long-term strategy of investing in key offshore markets seems to be paying off with export revenues making a major contribution to its profits. Comvita’s sales have been growing over the past five years at a compounded rate of 23 per cent.

END

News Release
July 19, 2004

Timely Introduction Of Children’s Elixir

Comvita’s release of its new Children’s Lemon & Honey Elixir is timely as winter ailments do the rounds of New Zealand homes, schools and pre-school facilities. Formulated to soothe throats and help clear airways, the elixir’s all-natural active ingredients make it ideal for most children over the age of two.

Comvita’s natural health consultant Caroline Davy, herself a mother of two young children, enthuses about the Children’s Lemon & Honey Elixir.

“Many elixirs for soothing throats are not particularly popular with children,” she says. “This tasty elixir was formulated specifically with children in mind.”

Davy says the real value of the elixir is in the active status of its natural ingredients.

“The health-giving effects of manuka honey are well known. New Zealand manuka honey has a worldwide reputation for its unique antibacterial properties. The UMF, or Unique Manuka Factor, rates its level of special antibacterial activity.

“The Children’s Elixir contains UMF 10+ manuka honey, propolis, apple cider vinegar, eucalyptus oil and (natural) lemon flavour,” says Davy.

The other key ingredient in the elixir is propolis which contains high levels of bioflavonoids, renowned for their exceptional antioxidant and immune-supporting properties.

A competition to name the Comvita bear, which features on the product’s new-style packaging, is currently running on the Comvita website at www.comvita.com

The Comvita children’s winter range also includes Strawberry Elixir and Lemon & Honey Lollipops.

END

News Release
July 26, 2004
Comvita Announces Solid Half-Year Net Profit

Comvita Limited has announced a solid half-year net profit after tax of $673,900 for the six months to June 30, an increase of 11.5 per cent over the corresponding period last year, while total revenue for the half year was $13,9 million against $10.9 million for the corresponding period last year.

Earnings per share for the same period amounted to 6.88cps compared to 6.58cps for the corresponding half year based on a weighted average number of shares on issue at the time.

The EBITDA, or cash earnings before interest and tax, for the half-year was $1.96 million, an increase of 53 per cent over the 2003 half-year figure.

Confidence in the company that won the large business sector award at the Environment Bay of Plenty Sustainable Business Awards in June is reflected in the current strong growth in its share price.

Announcing the result in his half-yearly report, Comvita chairman and recent recipient of the New Zealand Order of Merit, Bill Bracks, says the net profit was 7.5 per cent ahead of projections.

“It was a particularly satisfying result considering the fluctuating trading conditions generated by such events as exchange rates and international terrorism impacting on tourism,” he says.

“Although the 21 per cent increase in revenue was less than forecast, Comvita enjoyed better margins than expected, significant foreign exchange gains and reduced costs to deliver better than expected net earnings.”

Comvita’s Board has declared an interim dividend of 2cps (ex date August 13) payable on August 27. In line with expectations, this represents 38 per cent of net profit after tax. Full imputation credits will apply to the dividend. The Dividend Reinvestment Plan will be reinstated for the upcoming interim dividend after being suspended for the 2003 year final dividend payment during March, 2004. The DRP strike price is calculated at 95 per cent of the average price traded during the 60 days preceding the record date.

Cashflow generated during the six months was a deficit of $1.68 million – a result of increases in inventory and accounts receivable which in turn resulted from a record sales month in June.

Comvita’s strong result follows the successful completion on May 17 of an SPO (Subsequent Public Offering) of 3,658,537 shares. The SPO was managed by ABN AMRO Craigs and attracted wide interest, increasing the shareholder base from 255 to approximately 900.
The company issued a prospectus in April, projecting earnings of $1.58 million after tax for the full year. The Board remains optimistic that the prospectus forecasts will be met.

Bracks says the company’s move onto the NZAX proved timely and Comvita’s share price has seen strong growth since the SPO.

“The volume of shares trading since then has increased by more than 300 per cent. The main purpose of the capital raising was to strengthen the balance sheet, with the resulting shareholders funds ratio increasing from 33 per cent to 65 per cent.

“This positions the company well for growth in the short to medium term, with the Board actively seeking opportunities which are a strategic fit for the company.”

Acquisition of the Apimed medical honey business is yet to produce tangible benefits for shareholders. While Apimed continues to move toward commercial success, progress has been slowed by regulatory delays and increased operational and quality disciplines required for medical devices. Commercial returns are expected to show steady growth from next year.

Comvita’s UK partner, Brightwake Limited, successfully launched a manuka honey wound dressing in March. It has drug tariff approval through the National Health Service and is being successfully marketed to hospitals and pharmacies in the UK.

A new research programme between Comvita and Crop & Food Research Limited gained support from the Foundation for Research Science and Technology, and the acquisition of Bee & Herbal Limited has given Comvita greater operational flexibility in the procurement, storage and supply of its flag-bearer product, manuka honey.

Although beekeeper production of manuka honey last season was below average, Comvita’s policy of holding higher stocks will enable it to take advantage of increasing offshore demand.

Despite challenging domestic conditions in the first six months of 2004 with Asian tourism numbers down and a strong dollar impacting on purchasing power, strong growth in exports to Hong Kong, Taiwan and Japan demonstrated the success of Comvita’s export activity. Offshore highlights include securing the first order from China, where product will be retailed through duty free outlets, and opening a new office in Taiwan.

Bracks says while the general outlook remains fairly volatile, Comvita is confident of meeting its profit targets for the year.

“Exports to key markets continue to grow and new business development with Apimed wound dressings will continue to broaden our base.”

END