19 Feb 2013

Profit warning by Comvita

11:36 am on 19 February 2013

Comvita on Tuesday warned its profit will be lower than earlier forecast, blaming the high price it pays for honey.

The Te Puke health and beauty products company said it expects profit of $7 million for the year to March, compared with forecasts in November when it said it would improve on the 2011 profit of $8.2 million.

Comvita cited supply shortages and unexpected increases in prices for its key ingredient, manuka honey, as well as more difficult trading environments in Britain and Australia.

Chief executive Brett Hewlett said honey prices have surged after bad weather in the past two years led to a poor honey harvest.

Comvita lost some trade customers in the Australia and Britain after prices were increased.

But he said this summer's honey harvest is shaping to be above average and the company is able to control costs by producing more of its own honey.

Shares in Comvita fell nearly 5% to $3.72.