CVT-Comvita

[Shareguy]

 Craigs target price $4.10

CVT has set ambitious targets to continue on transformation programme
CVT has recently set ambitious five-year targets, aiming to double earnings by FY25. While this relies on some top-line growth, CVT are also aiming to significantly improve gross margins through 1) a mix shift toward higher margin digital sales, 2) simplification of its product range, and 3) a focus on China and North America. Overall, the key pillars on CVT's FY25 targets are mid-single digit revenue growth, 60% gross margins, and 20% EBITDA margins. The company has also become more disciplined with its harvest operations, aiming to be break-even in a bad year and making ~$2m of EBITDA in a good year. CVT has now narrowed its focus to high returning sites while closing unprofitable sites which is positive given the material impact a poor harvest season can have. Additionally, around 30% of Manuka plantations are CVT's own, which will likely grow to around 50% over.

I like the product and interested in results forecast for ye23.  This years result going to be good and already announced. Nothing more on possible takeover that was reported.

[BlackPeter]

Craigs target price $4.10

CVT has set ambitious targets to continue on transformation programme
CVT has recently set ambitious five-year targets, aiming to double earnings by FY25. While this relies on some top-line growth, CVT are also aiming to significantly improve gross margins through 1) a mix shift toward higher margin digital sales, 2) simplification of its product range, and 3) a focus on China and North America. Overall, the key pillars on CVT's FY25 targets are mid-single digit revenue growth, 60% gross margins, and 20% EBITDA margins. The company has also become more disciplined with its harvest operations, aiming to be break-even in a bad year and making ~$2m of EBITDA in a good year. CVT has now narrowed its focus to high returning sites while closing unprofitable sites which is positive given the material impact a poor harvest season can have. Additionally, around 30% of Manuka plantations are CVT's own, which will likely grow to around 50% over.

I like the product and interested in results forecast for ye23.  This years result going to be good and already announced. Nothing more on possible takeover that was reported.

Well, yes - but don't forget the risks: Single major market (China) with high geo political risks, a non essential product with uncertain health claims (actually both quite comparable to A2M - and look what heppened to them) - and fundamentals even today not cheap - at best fair priced.

I'd consider this company as low gain high risk operation ... but sure - they managed to hype the price up before, maybe they manage to repeat this exercise. Is this enough incentive to invest?

[winner (n)]

Nestle acquire Egmont Manuka

Obviously weren't  interested in Comvita

https://www.rnz.co.nz/news/business/470005/nestle-to-buy-auckland-health-supplements-firm-the-better-health-company

[Shareguy]

Interesting though winner.

[Sideshow Bob]

Unfortunately doesn't mention a price.....I seem to remember that when Better Health Co got sold 4-5 years ago, it was at a multiple of revenue (not earnings).

[Plata]

I note they are doing a 50% off sale on UMF 10 as well as a few other products. Wonder why they built up inventory so much only to sell it at such a steep discount? I like to use google trends and similar tools to try get an idea of how things are going, not sure if it is a valid tool but comvita search interest doesn't look impressive over the last few years...

Disc: Sold out a few weeks ago, content with that decision so far.

[Plata]

https://www.bbc.com/news/world-australia-61976446
Looks like the cat/mite is out of the bag across the ditch. Will level the playing field for comvita if manuka producers  in Australia have to contend with this parasite like we do. Those poor Australian manuka producers have had a tough last year or two haven't they?

[Plata]

https://www.1news.co.nz/2022/07/01/nz-secures-historic-free-trade-deal-with-european-union/

Manuka honey tariffs to the EU eliminated, not a particularly strong market for comvita right now but could this change things?

[Shareguy]

EU not a big market. Increase in volume today.

[Shareguy]

Good to see FTA recognises the word "Manuka" as a New Zealand word. Out friends across the ditch won't be happy with this.

https://www.scoop.co.nz/stories/BU2207/S00034/free-trade-agreement-with-eu-recognises-distinctiveness-of-manuka-as-a-taonga-species-exclusively-from-aotearoa.htm

[Shareguy]

Well done to David. Has delivered near record earnings (2 best). This guy has performed and has achieved what he said he would.

[Left Field]

Nice result.... well done holders.

https://www.nzx.com/announcements/397580

- EBITDA $30.1M +18% and +110 bps vs PCP
- Operating profit $20.1M +65% vs PCP
- NPAT $12.8M +35% vs PCP
- Record revenue $209M +9% vs PCP
- Record margin 60.3% +640 bps to $126M +21.8% vs PCP
- Record investment in brand $28.1M as long- term brand building continued
- Strong top and bottom-line performance:
Top and bottom-line growth in focus growth markets, China and North America
Top and bottom-line growth in Mānuka honey product category
Top and bottom-line growth Ecommerce, Ecommerce 39% of total revenue
- Business transformation plan on track
- Net debt increased by $21.M since 30 June 2021 to $25.5M, leverage ratio <1x
- Positive operating cashflow
- 40% reduction in total recordable injury frequency rate (TRIFR)
- Fully imputed final dividend of 3.0 cps declared, full year FY22 dividends of 5.5 cps +37%

[BlackPeter]

Nice result.... well done holders.

https://www.nzx.com/announcements/397580

- EBITDA $30.1M +18% and +110 bps vs PCP
- Operating profit $20.1M +65% vs PCP
- NPAT $12.8M +35% vs PCP
- Record revenue $209M +9% vs PCP
- Record margin 60.3% +640 bps to $126M +21.8% vs PCP
- Record investment in brand $28.1M as long- term brand building continued
- Strong top and bottom-line performance:
Top and bottom-line growth in focus growth markets, China and North America
Top and bottom-line growth in Mānuka honey product category
Top and bottom-line growth Ecommerce, Ecommerce 39% of total revenue
- Business transformation plan on track
- Net debt increased by $21.M since 30 June 2021 to $25.5M, leverage ratio <1x
- Positive operating cashflow
- 40% reduction in total recordable injury frequency rate (TRIFR)
- Fully imputed final dividend of 3.0 cps declared, full year FY22 dividends of 5.5 cps +37%

Hmm - not wanting to rain into the parade ... but isn't Comvita one of the best examples for a cyclical agricultural business with high political risks and relying on a questionable health claim?

Weather good - business good
Weather too wet, too cold, too dry or too hot - business bad
Customers scared about their health - business good
new (or old) heatlh fad (re-)appearing (tiger penis anybody?) - business bad
political stars aligned - business ok
NZ in China's bad basket - business crushed

Sure - looks like business swapped up in the last year, but what does this tell us about the time to come? Nothing.

[Auto Rower]

Nice result.... well done holders.

https://www.nzx.com/announcements/397580

- EBITDA $30.1M +18% and +110 bps vs PCP
- Operating profit $20.1M +65% vs PCP
- NPAT $12.8M +35% vs PCP
- Record revenue $209M +9% vs PCP
- Record margin 60.3% +640 bps to $126M +21.8% vs PCP
- Record investment in brand $28.1M as long- term brand building continued
- Strong top and bottom-line performance:
Top and bottom-line growth in focus growth markets, China and North America
Top and bottom-line growth in Mānuka honey product category
Top and bottom-line growth Ecommerce, Ecommerce 39% of total revenue
- Business transformation plan on track
- Net debt increased by $21.M since 30 June 2021 to $25.5M, leverage ratio <1x
- Positive operating cashflow
- 40% reduction in total recordable injury frequency rate (TRIFR)
- Fully imputed final dividend of 3.0 cps declared, full year FY22 dividends of 5.5 cps +37%

Very good result left field considering the economic headwinds :- the future look's even better may have to get in at these bargain prices , be a shame to miss out on this one when the bear recedes

[Stockgathering]

Spend some time today analyzing CVT, was looking in the 2022 Annual report for what shareholding the directors have in this company. No luck, could not find any information on it.
I was under the impression that directors shareholdings need to be disclosed in the annual report.
Am I mistaken?