Disappointed with their latest report. Not much happening really, just the usual glossy presentation with no real momentum. I got out soon after the results.
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Beginning to agree with you there sb9
Many rave about David Banfield ... seen as the Messiah to lead Comvita to great glory.
As far as I'm concerned the jury is out re Banfield.
Methven were famous for their presentations - a joy to behold and pretty amazing things that made abysmal performance look fantastic. Banfield loved presenting these glossy presentations and he loved doing innovative 'things' and attending award functions to collect Best of Awards etc etc etc .... and all the time shareholders were left lamenting, year after year, never delivering on promises. Get the gist of what I'm saying.
But in saying that Banfield did an incredible job in dressing Methven up for sale and got GWA to acquire them. Shareholders finally got some sort of return and they were put out of their misery.
Maybe that's the path Banfield is taking again .... hoping for a $4 offer later in the year
$3 you recon? - Ouch. I have no clues, but glad I sold out (months ago).
But are you sure David can do that that fast? With Methven it took him from memory five years or so to get the ship moving and the books looking good enough for a sell :scared: ;
To be honest - I had more hopes in Nigel Greenwood (their CFO - he used to look after Synlait while this was still a company to be proud of looking after), but not so sure anymore. Honey is more sticky than milk, i.e. maybe more difficult to get rid off ... ?
Can understand why some of us have lost faith. I’m going to continue to hold and will reassess next results. If I don’t see some decent growth in npat with some of that extra honey sold then I’m out.
Craigs are certainly positive. Extract from latest note.
Maintain Overweight - #1 agri sector pick
Reuters
CVT.NZ
Bloomberg
CVT NZ
Ticker
CVT
Exchange
NZX
3.30 4.10
Following CVT's 1H22 result we maintain our Overweight recommendation and rank the stock as our #1 agri sector pick. We believe CVT offers the best earnings growth prospects (23% EPS CAGR over next 3 years) relative to its current earnings multiple (18.5x FY22 EPS) vs. the other profitable agri names under our coverage. Key to the bull thesis is the achievement of management's FY25 targets (60% gross margins, 20% EBITDA margins, led by higher margin digital sales in China and North America). FY25 is clearly some way out but if these targets are achieved it would leave CVT trading on just 8.7x FY25 earnings and looking materially undervalued. In 1H22 CVT made good progress toward these objectives with gross margins lifting an impressive +760bps vs. pcp to 56.6%, and strong growth was reported in Mainland China (net contribution +40%) and North America (net contribution +75%). The effects of the pandemic are still being felt in some divisions however with Hong Kong, Japan, and ANZ markets still needing to recover, and they present a drag on earnings for the time being.
A record interim result; FY22 guidance unchanged
CVT reported EBITDA of $12.1m for 1H22, a record interim result and up +14% on pcp. NPAT however was flat on pcp at $3.5m, due to non tax-deductible DD expenses on an acquisition that did not eventuate. Guidance for FY22 EBITDA of $27m-$30m was reiterated, though a more informed guidance update is usually provided in April after the honey harvest.
Forecasts largely unchanged
We make only minor tweaks to forecasts, and now expect FY22/23 NPAT of $12.7m/$16.5m, compared to $12.1m/$16.1m previous. Medium term, we forecast $40m EBITDA by FY25, which is below the company's target EBITDA level (c.$50m) to account for execution risk.
Target price -2% to $4.10
Our 12-month target price falls -2% to $4.10, with minor upward tweaks to our forecasts offset by revisions to DCF assumptions to better align with those used for our other companies under coverage. Key DCF assumptions are now WACC 8.8% and TGR 3.0% (7.6% and 2.0% previous). Key downside risks include slower than expected execution toward targets, harvest risk, daigou
I understand that selling something with alleged health benefits to China can be a great money spinner, no matter whether it works or not.
Just wondering, though what happens if & when China attacks Taiwan? Of course - this is not a given, but under the circumstances it is clearly a risk.
Fonterra stopped already selling milk to Russia ... would Comvita still be allowed and willing (brand damage) to sell anything into China if Xi turns into Putin make 2?
I suppose loosing the Chinese market would be material for Comvita if it happens?
Losing the China market would be material to the whole of NZ economy - period.
Imagine no dairy, meat, seafood, timber, fruit and services (tourism & education) exports. Then, NZ will have to stop importing from China as well.
In other words, it’s not going to happen.
But what a delicious thought to short the NZ$ & China RMB however!
Craigs is CVT's house broker so their recommendation must be treated with caution. Having written that, Craigs is one firm with huge FUM (via clients' portfolios) - so a positive recommendation from them means their advisors can invest & add CVT to the portfolios. Potentially a lot of buying there.
Jarden picking CVT as one of their picks for 2022 interests me for obvious reason - M & A being Jarden's principal driver in many of their recommendations over the years.
Meanwhile, here's a recent example of CVT's strategy at work in the US :
https://www.womenshealthmag.com/food...l-honey-again/
Interesting article about Comvita in China & profile of Andy Chen, Asia CEO.
https://www.newsroom.co.nz/how-comvi...staff-in-china
Keeping up with what Banfield calls “the most dynamic market in the world” is never going to be easy, Andy Chen says. But he’s optimistic his new Asia team can meet Comvita’s goals of double-digit top and bottom line growth in China this year. That’s up on sales of $73 million in 2021.
Maybe they can do even better in the future, Chen says. He is lining up new strategic partners to sell and distribute Comvita products in its four main markets - Beijing, Shanghai, Shenzhen and Guangzhou. "Watch this space," he says.
Chen says major plantings of mānuka forest in New Zealand (the company has put in 10 million trees over the last few years) will secure supply for a potential big expansion in the Chinese market, and promote the company’s environmental credentials to its newly eco-conscious consumers.
The potential is mind-blowing, and a little overwhelming, he says.
CVT share price still going nowhere ….at least it’s not going down (much)
Probably need a bit more news to hype it up again
Come on David …tell us something