Comvita posts $13m half-year loss

The company is optimistic results would rebound in 2021.
The company is optimistic results would rebound in 2021. Photo credit: Getty

By RNZ

Comvita has upped its revenue, but made an overall loss in the six months to December, partly due to a writedown because of the Australian bushfires.

The honey producer and exporter made a $13 million loss - a sharp drop from the previous year's loss of $2.7m.

However, it saw 30 percent growth in its China market after buying its distributor in May, contributing to an overall revenue boost of 20 percent to $93.8m.

Chairperson Brett Hewlett said the result was disappointing but was optimistic results would rebound in 2021.

"We are working tirelessly to turnaround performance and deliver the result we know the business is capable of."

Chief executive David Banfield, who took on the role last month, said the company would launch a plan to improve gross margin and decrease fixed costs by at least $5m per year over the next three years.

"It's evident from our performance that our current cost base is too high and incapable of supporting delivery of our long-term earnings growth targets.

"Our transformation plan is designed to bring the focus back to the business, simplify operations and ensure we have sustainable profitable returns from all of our investments."

Banfield said the business had become overly complex cumbersome and slow to react, and simplifying operations would be key.

"Our ability to free up cash by simplifying and integrating processes will enable us to spend our time focusing on places where we win, in-market in front of customers and consumers."

He said in the short-term the effects of the Covid-19 outbreak were hitting foot traffic sales, however where people were shopping there was a strong demand.

"Historically we have seen a significant uplift in sales as consumers boost immunity following an outbreak of flu."

RNZ

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