Comvita, the New Zealand-based honey manufacturer, today (27 November) issued a profit warning amid pressure on sales in China and the US.
In a trading update, the company said it sees its half-year EBITDA falling 20% year on year after accounting for investment in ERP.
Comvita, which saw its shares slide more than 11% by the close of trading in New Zealand, also forecast a decline in first-half revenue of up to 5%.
The company pointed to consumer concerns over the economy in China and North America. Inflation had weighed on “discretionary expenditure” in the US, Comvita added, hitting the honey category and the Mānuka segment.
Group revenue in the first four months of Comvita’s financial year, including the contribution from the Singapore retailer HoneyWorld it acquired in July, fell by around 10%.
The performance of HoneyWorld is “progressing according to plan”, Comvita said.
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It added: “Comvita does not believe the first four months’ result is indicative of its underlying trading and is encouraged by the November performance which points to improving consumer confidence and demand.”
The group is forecasting its annual revenue for the year to 30 June 2024 will come in between NZ$245m (US$149m) and NZ$255m, compared to last year’s NZ$234.2m.
Full-year EBITDA after the spending on ERP is expected to be between NZ$33m and NZ$38m,” versus the NZ$33.5m generated a year earlier.
CEO David Banfield said: “It’s disappointing to share today the impact of the economic slowdown in China and North America on us in the first four months of the year and its likely knock-on impact for the full year.
“We are forecasting that this is temporary in nature, as we see improving underlying demand and improving consumer sentiment data. Unfortunately, we do not believe it will be possible to make up this impact in this financial year. We do however retain our FY25 forecast and guidance.”
Shares in Comvita were down 11.49% at NZ$2.62 at the closing bell in New Zealand today.