Hi all, maiden speech so thanks. CVT fundamentals solid. On the right side of inflection point. Data suggests a positive report on the 25 Feb. $3.20 seems cheap to me. What am I missing?
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Hi all, maiden speech so thanks. CVT fundamentals solid. On the right side of inflection point. Data suggests a positive report on the 25 Feb. $3.20 seems cheap to me. What am I missing?
Looks like this announcement from y'day has gone under the radar...
https://www.nzx.com/announcements/367664
Comvita, Global market leaders in Mānuka honey, are delighted to announce that they have formed a strategic partnership to accelerate their digital revenue and capability with London listed business THG plc.
THG is a UK-based global technology platform company, specialising in taking brands direct to consumers. It retails its own brands such as Myprotein and Lookfantastic via its end-to-end ecommerce platform THG Ingenuity, which also powers hundreds of third-party brands such as Hotel Chocolat, Antipodes Skincare, BWX Limited, and now Comvita.
Commenting, David Banfield, Group CEO Comvita said, “As part of our 5-year plan to transform performance at Comvita we shared our goal to grow our digital sales to 50% of the total group by 2025.
“The partnership with THG Ingenuity enables us to step change our online capability and ensure that our loyal fans and consumers around the world receive market-leading service and functionality that they should expect from a global category leader. We look forward to a long and mutually beneficial partnership.”
John Gallemore, CEO of THG Ingenuity, said, “Through our own brands and via THG Ingenuity, we have proven expertise in growing D2C capabilities within the FMCG sector. We are proud to be partnering with Comvita at such a crucial point in its ambitious digital transformation journey.”
Yes this has the potential to dramatically increase their sales in the UK. Thg is a very successful company and has Substantially increased sales in the brands it represents.. I’m expecting good things next week.
2020 AR disclosure
"Business materially impacted by loss of footfall in
tourism, retail and Daigou channels
- Mānuka honey sales impacted by Daigou and
tourism
- H2 revenue impact AU/NZ $11M"
If ATM is anything to go by.this.has the potential to badly affect 1HY 2021 revenue for CVT... I hope not:t_up:
Relax.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CVT provided guidance at their AGM on 22 Oct 2020, nearly 4 months into their F21 year :
"I’m pleased to report a strong Q1 performance with double-digit revenue growth, strong margins, costs in line with expectations, and with brand investment to support our differentiated model.
Including Q1 FY21 we have now delivered nine consecutive profitable trading months. We’re absolutely focused on delivery of our FY21 result as we reduce inventory, SKU count, and look to further simplify the business and free up cash in the process.
We maintain our full year guidance:
1. Targeting 150 BPS improvement in GP
2. Targeting mid-single digit revenue growth in FY21 (20% EBITDA Benefit)
3. Underlying fixed cost reduction of NZD$4M before transformation costs of NZD$1.5M
4. Material increase in marketing investment in North America and China cNZD$6M
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~
If their results have been materially adversely impacted by anything in the last few months, they would have had to disclose by now.
CVT has already announced that they will report on 25 February next week, so you can safely assume that they are on target to a significantly improved result for H1 F21.
https://www.nzx.com/announcements/367790
Looking forward to the results and a profit upgrade.
Well said Balance . Agree it’s going to be good.
For me, longterm they still have plenty to prove. Made some shocking forays in the past (seadragon etc ) They are coming off a great honey harvest and covid tailwinds, where everything vaguely healthy is flying off the shelves. How will they do in normal/bad years. this is the question.
Agreed.
CVT was one of the darlings of the market but made one blunder after another until almost all confidence was lost in the company.
There’s a major reset going on and it will take a few years for the market to regain confidence that there is more to the company that just seasonal vagaries & hype about manuka health.
That’s why the sp is $3.20 and not $5.00.
Obviously I am confident they are on the right track with new management and the shakeout which is happening in the manuka honey industry.
Broker view of where CVT is and what the company needs to do:
In a note titled "Getting Back to Basics," Jarden analysts said in recent years Comvita had failed to successfully leverage the grey channel opportunity due to a lack of customer diversity and downstream margin management.
"Grey channel activity has potentially become less important as Comvita has increased focus on direct trade through Comvita China and, with this channel appearing to hold up amid Covid, likely benefiting from honey being considered an immune product," Jarden said.
"In light of this, the company needs to demonstrate better underlying performance and communicate it in a simple, uncluttered manner.
"If Comvita is able to build on recent progress and deliver, or at least show some progress, on signalled cost-out initiatives there could be upside risk to our forecasts, however expectations management has been an issue in the past," the broker said.
Comvita's goal now is to achieve profitable growth, minus seasonal slings and arrows of outrageous fortune.