Comvita shareholders gathered in Paengaroa to hear the good news this week – annual sales topped $100million for the first time, driven by a 17 per cent increase in sales.

Comvita chairman Neil Craig says annualised sales for the 12 months ending June 30, 2012 are $102 million.

Paengaroa-based business Comvita's annual sales topped $100million for the first time.

The company's net profit after tax for the year to March 31, 2012, rose to $8.2million on sales, which grew 17 per cent to $96 million.

'The results for the 2012 financial year demonstrate Comvita's business model is delivering,” says Neil.

'The business is seeing significant operating leverage from the infrastructure put in place over the last six years.

'Comvita is known for quality and product integrity in health and beauty products. Consumers reward us with a premium against other brands that lack the testing, quality standards and product and brand innovations that are the foundations of our success.

Neil says Comvita has control of channels to market from raw material supply, through to the consumer.

'Our ongoing product innovation is based on in-house research and development, rather than a whole range of ‘me too' commodity type products.”

The rewards to shareholders from continued enhancement of the business model will be increased EBIT margins, increased earnings per share after tax and increased dividend flow from earnings increases. A consequence will be a higher share price, says Neil.

'While Comvita's share price had recovered significantly in the last 12 months – at a historical price to - earnings multiple of just 11 times – it was still cheap relative to the New Zealand market of around 15 times,” says Neil.

'At today's share price we have a gross dividend yield of 6 per cent. This is also significant when considering Comvita's rapid earnings growth phase that is now underway.”

With continued rapid growth Comvita faces challenges in remaining globally competitive in the face of a perennially strong NZ dollar, securing raw material supply as sales increase and maintaining a strong innovation focus.

In order to meet those challenges, Comvita CEO Brett Hewlett says Comvita will continue to spend on control and management systems, enhance internet selling capability and make acquisitions in honey supply and other raw materials.

'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,” says Brett.

Comvita has the financial capability of making acquisitions, says Brett.

'We have demonstrated we can sustain this level of growth and that we can continue to achieve operating leverage gains provided by the scale and scope of our local and global operations. These all point to a continuing improvement in net earnings and growth in shareholder value.”

Other achievements during the year ending March 2012 include seeing off an unwelcome takeover bid, Medihoney global sales growing by approximately 38 per cent p.a, and normalised, Net Earnings (NPAT) growing by 136 per cent.

Comvita also increased its beehives by 50 per cent, and acquired a new state of the art honey extraction facility and bought a Waikato based apiary business.

The board of directors thanked shareholders for their support in a year when Comvita faced a generally tough market and the unwelcome distraction of the Cerebos takeover offer.