There is still money in honey, with manuka honey producer Comvita reporting a $1.56 million profit for the past year, although the company is declining to declare a dividend.

The surplus was built on a 26.4% increase in total revenue for the year, with the medicinal honey company reporting $71.44 million in sales.

The company did record a fall in sales in its New Zealand and the UK markets, but this was offset by higher growth in its Asian and Australian business.

The net surplus after tax falls to $0.77 million when non-cash impairments and fair value movements of financial instruments are included.

Comvita chairman Neil Craig says the company has benefited from spending “significantly more” in the marketplace than it otherwise would have to secure its position.

“We also moved to reduce costs and rationalise the business resulting in a number of one-off restructuring costs. This included the closing of our Cambridge factory and warehouse."

With increased profit and inventory reduction over the past few months, Comvita was able to pay back $2.5 million of its bank debt and is expecting to further reduce debt over the next 12 months.

A review of the company’s core operations saw some rationalisation of production and supply chain functions, while staff numbers have been reduced significantly.

However, the desire to preserve cash has seen the company decide to not declare a dividend at this time, according to Mr Craig.

“This position will be reviewed again after the six months to September 2009 result. It should be remembered however that Comvita's profitability is more weighted to the second half of the financial year."

The company has been on an aggressive acquisitions hunt over the past few years, with mixed success.

While Olive Products Australia and the Hong Kong distribution acquisition Greenlife have been performing well, Comvita has conceded that Medihoney has been slower to produce profits than anticipated at the time of the acquisition last year.

But Comvita has expressed confidence about the long-term success of the Medihoney brand, due to its growing market acceptance in the established medical wound care market in North America, UK and Europe.

Comvita chief executive Brett Hewlett acknowledges that the company’s earnings in the past two years have been below market expectations, but it was already seeing an encouraging start to the new year.

"During the last quarter of the past financial year our sales were more than 25% up on the same period in 2008. The first two months of this year are following a similar trend. We remain firmly on course with our growth strategy and are focused on delivering a sustainably higher level of profitability for our shareholders."