Originally Posted by
Balance
Comvita issues are that:
1. The golden days of super high margins for its products are over,
2. The company's cost base is too high,
3. Competitors (like Hong Leong group and China players) have entered the market - they have deeper pockets and superior distribution & marketing network in China & Asia,
4. Competitors have locked in supply contracts with numerous bee-keepers, depriving CVT of the abundant supply it used to access,
5. The new MPI standard has leveled the playing field - CVT is no longer the only standard bearer of quality manuka honey,
6. Much of the manuka honey out there are multi-flora, not mono-flora.
7. Management and board have for 4 years showed no progressive ability to tackle and manage the above issues (refer post #1565)
Let's see what the new CEO can do.
My expectations are that he will initiate a massive write-down, necessitating a capital raising and several years of 'repositioning' - even while its competitors move ahead.