CVT-Comvita

[Shareguy]

Surprised the share price is not well under $1

[Basil]

Hey Basil .... Good call you sold CVT above 10 bucks a few years ago

Glad you listened to me at the time I said it was a dog and 10 bucks plus was just ridiculous.

Thanks for jogging my memory mate.  It was so long ago I'd kind of forgotten about it until you reminded me.
Your input also helped me sell out of SML at $10+ many years ago.    Thanks again for that one too.

[Teitei]

CVT has stubbornly refused to discount its products to maintain its premium positioning. And it has tried yo make a virtue of building up and holding on to stock.

Meanwhile, its other manuka honey competitors have been and are discounting heavily - initially multi-floral low UMF but now, high UMF 15+.

The gold rush seems over and CVT is being left behind.

[Shareguy]

https://www.cnn.com/2024/07/26/business/lvmh-luxury-firms-china-slowdown?cid=ios_app

[Basil]

Burberry shares also tanking.
https://ukinvestormagazine.co.uk/burberry-shares-tank-after-sales-decline-and-ceo-steps-down-dividend-suspended/#:~:text=British%20luxury%20fashion%20house%20Burberry%20shares%20sank%20on,were%20down%2010%25%20at%20the%20time%20of%20writing.
People want value these days.    Regular honey is fine as far as I am concerned.

[snapiti]

I see the manuka honey industry has turned out to be another ostrich egg investment.
No buyers want even the medical grade.
My spys tell me the 2 main healing chemicals in manuka honey can be made in the lab and added to any grade of manuka honey.
 

just an update from to my previous comments, to be eligible for the label manuka honey there has to be present leptospermum (manuka plant DNA) there is no specified level it just needs to be present. The real value is in the two chemicals present, MGO and UMF. The higher the level of these two chemicals the higher the value of the honey. Unfortunately both chemicals can be made  in the lab then added to low grade manuka honey to add value, so all the money that has been poured into the industry can be undone by those buying very low grade Manuka honey and manufacturing and adding in the chemicals later.
 Right now the apiarist cant find a buyer for medium to high grade manuka honey. They are all buying into propaganda from with in the industry which has them believing this lack of demand is temporary, none that I have spoken to want to believe it is because of lab modified product, even though they are aware of it.       

[winner (n)]

Jeez Comvita obviously so full of optimism or they have no real idea as to what's going on

Here's how their guidance has evolved last 12 months

FY23. EBITDA $33.5m
Aug23 guidance ....double digit growth in EBITDA
Nov23 guidance $33m-$38m
Feb24 guidance . $30m-35m
May24 guidance $23m-$28m
July24 unaudited $17.1m

[Shareguy]

Craigs latest

Honey I shrunk the earnings

Earnings downgrade number 4. Maintain Neutral
 Comvita has issued its fourth downgrade for FY24, now guiding to EBITDA-after-ERP and non-recurring costs of $17.1m, 30% below CIPe. At a reported level EBITDA is close to break-even and NPAT is a loss of $16.8m. CVT stated that continued demand weakness in China and the flow-on effects through the rest of Asia were to blame as well as a number of one-off costs. Though CVT's FY25 earnings prospects are uncertain, they will have the benefit of cycling a number of non-recurring costs from FY24 including (1) c.$7m ERP costs, (2) costs relating to responding to a Non-Binding Indicative Offer and (3) costs related to the exit from its legacy Medibee joint venture in Australia. This should push FY25 NPAT towards positive territory, but an uplift in demand from China is likely required to drive NPAT beyond breakeven. While CVT's NTA may provide some comfort for investors at $2.63/share as at Dec 2023, how realisable that is remains uncertain. For now CVT sits firmly in the show-me-the-recovery category and trading in line with our revised TP we maintain Neutral.
Is there NTA support? Yes and no

[winner (n)]

Don't forget Comvita won Best Growth Strategy at some high profile business awards late last year

[Shareguy]

Indeed. Massive write downs of Honey coming and although a recent purchase the Singapore  honey business might have some impairments. Looking at things even the possibility of another CR is not off the cards I reckon.

A sting in the tail for sure. Glad I'm well out.

[BlackPeter]

Jeez Comvita obviously so full of optimism or they have no real idea as to what's going on

Here's how their guidance has evolved last 12 months

FY23. EBITDA $33.5m
Aug23 guidance ....double digit growth in EBITDA
Nov23 guidance $33m-$38m
Feb24 guidance . $30m-35m
May24 guidance $23m-$28m
July24 unaudited $17.1m

These were the days when happy posters told us about the land of milk and honey ;

Today all they have left are some nearly worthless shares of SMT and CVT    ;

I guess just shows us that the future is neither theirs nor ours to see

"Que sera, sera
Whatever will be, will be
The future's not ours to see
Que sera, sera
What will be, will be"

https://www.youtube.com/watch?v=CcWbZUgymkw&t=41s

 

[Basil]

Agri stocks and their performance is, frankly, as unpredictable as the weather. 

[BlackPeter]

Agri stocks and their performance is, frankly, as unpredictable as the weather. 

True. Pretty similar to any other industry (even if the cycles might be triggered by different events).

The stories of hype driven share price development goes in all industries - agriculture, mining (incl. some very classical examples), car manufacturing (Tesla recently), chemicals (just in case anybody followed Bayer when they bought Monsanto and what happed afterwards), GameOut ... and any other industry.

Its just - people are story-, fear- and greed- driven, and nobody has a clue what might happen next.

But lets face it - while CVT is an agri stock, the big up- (and down) cycle over the recent years was mainly caused by (unproven) health impacts combined with hype and FOMO. Just another story of hype and gloom.

[Left Field]

CVT changes the guard....CEO resignation etc..... is it enough?

https://www.nzx.com/announcements/436026

Effective from the 31st August the following changes will be implemented;
 
 - David Banfield resigns as CEO and Managing Director and will assume a project based role of Strategic Advisor to the Board.
 - Brett Hewlett resigns as Director and Chair of the Comvita Board and assumes the role of Acting CEO.
 - Bridget Coates is appointed as Chair of the Board.
 - Mike Sang is appointed Chair of Audit & Risk Committee.
 - Overall board numbers will be reduced from currently eight Directors to six, with the majority as Independent Directors.
 - Alan Bougen, co-founder of Comvita, has been invited by the Board to act in an advisory capacity as Brand Ambassador and Founder.

[Shareguy]

David on way out.  Impairments to come on recent Singapore buy and honey valuation I reckon. Then there is the debt.