Comvita ready to pounce on potential acquisition targets
The company has a strong balance sheet and has "significant financial capacity to make acquisitions".
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BUSINESSDESK: Comvita, which makes products based on the virtues of manuka honey, is in a position to snap up any potential takeover targets, chief executive Brett Hewlett told shareholders at their annual meeting in Te Puke.
The company has a strong balance sheet and has "significant financial capacity to make acquisitions", he said. Comvita is looking to make acquisitions in honey supply and other raw materials.
"Any such acquisitions would need to be demonstrably earnings-per-share positive," Mr Hewlett said. "We will also continue to research new product opportunities that fit with the Comvita brand, which may need to be acquired as opposed to being developed in-house."
Comvita staved off a hostile takeover bid by Suntory-controlled Cerebos Greggs last year, pitched at $2.50 a share, and went on to post record annual profit on fatter sales.
The shares rose 1.8% to $3.36 in trading today.
Since then, its annual pace of sales has accelerated, with revenue of some $102 million in the 12 months ended June 30. The company has a March 31 balance date.
Mr Hewlett said the company will continue to spend on its control and management systems, and will look to improve its online sales capacity.
Chairman Neil Craig said Comvita's challenges are the strong New Zealand dollar, which erodes the value of foreign sales, securing raw materials in the face of rising sales and keeping its focus on innovation.
Comvita has attracted more interest from the broking fraternity and institutional investors, and is achieving more support from a wider shareholder base, it said in presentation slides.
Paul McBeth
Fri, 27 Jul 2012
Fri, 27 Jul 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Comvita ready to pounce on potential acquisition targets
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