Comvita, which produces health products from manuka honey and olive leaves, expects a 15 percent fall in annual profit because of expensive honey, supply shortages and tough trading conditions in Britain and Australia.
The Te Puke-based company expects a net profit of $7 million in the year ending March 31, down from $8.2 million a year earlier which it had been expecting to beat, Comvita says in a statement. Sales are forecast to rise 4 percent to about $100 million.
The profit warning comes after increases in wholesale honey prices of up to 50 percent and weak consumer confidence in Australia and the UK, which made it hard to pass on rising costs.
"While we regret the need to downgrade the earnings outlook for this financial year, we remain confident that the reasons for the downturn are isolated and that mitigation measures are already in place," the company says. "The current strategy still holds with business on a path of strong earnings growth beyond this financial year."
The stock fell 1.3 percent to $3.85 in trading yesterday, and has gained 5.1 percent this year. It's rated a 'hold' by the one analyst following the company, according to Reuters data, with a target price of $3.65.
Comvita has been on a buying spree in the past year to lift its direct beekeeping ownership, producing a third of its honey needs, and last month bought an 85ha organic olive estate that has the potential to more than meet its requirements.
The company will announce its annual result in late May.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Where the polls stand on the eve of the first US presidential debate
- AngelEquity launches with three investment offers
- Receiver close to Atmospheric sale
- 'Real housewife' lawyers up, accuses Devoy of bullying, defamation
- Sky will take a gamble and put Westworld, aka 'the next Game of Thrones' on Neon
Most listened to
- No knockout blows in first presidential debate, says NBR's Nevil Gibson
- Intueri's problems raise questions for the board, says Martin Watson of the Shareholders Association
- ANZ's Philip Borkin and NBR's Jason Walls on what's next for the kiwi dollar on Currency Talk
- AngelEquity's Bill Murphy on why his platform won't cater for retail investors
- Spark exec Jason Paris defends his company's honour after it tops ComCom's most-complained-about list
- FMA lawyer Justin Smith counters the Goldman Sachs defence