Complementary health products maker Comvita New Zealand reports strong trading, well ahead of last year's performance and expects to finish the year with a sound financial result as it prepares to list on the NZX's new Alternative Exchange (AX) market.
In the company's half-yearly report Comvita's chairman, Bill Bracks, said the after-tax profit of NZ$604,000 (€319,500) for the six months ending June 30 was 'pleasing in view of the uncertain trading conditions that have prevailed'.
"The first six months of 2003 have been characterised by a series of extreme events that included the Sars virus, the Iraq war and the Pan Pharmaceuticals product recall," commented Bracks.
"The impact of these events has seen a worldwide decline in tourism and a resulting negative impact on sales in our own tourism-related business. This is especially true of manuka honey sales."
However he noted that Comvita has survived these events well, notably due to the increased demand created by the Sars outbreak for its propolis range of products resulting in significant offshore sales, especially in Hong Kong and Taiwan. He added that the company was hoping the longer term effect of this would be positive Comvita brand recognition in those markets and wider recognition of the beneficial properties of its propolis range.
Bracks stated that Comvita's consolidated net profit before tax and equity earnings adjustment at 30 June was 8 per cent above budget and 36 per cent ahead of last year's standing at NZ$1.08 million.
"Favourable exchange gains from long term forex purchases helped to produce an above budget profit. However, equity accounting losses from subsidiary Extracts New Zealand totalling NZ$30,000 and provisions for a New Zealand Colostrum Gold write-down of NZ$80,000 have affected the final figure of NZ$604,000 after tax profit which was $53,000 below budget," continued Bracks.
He also stated that the company was considering negotiating for a controlling stake in Colostrum Gold as it feels that the potential for colostrums is very high.
Offshore, Comvita Japan and UK were registered as performing extremely well, while Bracks added that a regional manager has been appointed in Hong Kong and the distribution system in Australia has been restructured to prepare for the appointment of further sales personnel in that market.