News Release
June 8, 2006

Comvita wins Supreme Sustainable Business Award

Paengaroa-based natural health products company Comvita is elated at winning the Environment Bay of Plenty Sustainable Business Supreme Award last week.

Chief executive Brett Hewlett says it was a pleasant surprise when the company was announced as the supreme winner against stiff competition from 61 of the region’s most prominent businesses.

Sustainable Business Network Bay of Plenty regional manager Calum Revfem says Comvita is an excellent example of a business that enters the awards to benchmark its efforts against peers to get feedback and make progress.

“Comvita really stood out for the systematic way that it addresses sustainability issues.  It’s obvious that sustainability is a core element of Comvita’s business. It’s completely ingrained in their systems and culture.”

Hewlett says Comvita is totally committed to improving sustainable business practices and continuing to be a leader in the field.

“Sustainability is at the core of what we do but we are always looking for ways to further integrate environmental, social and economic best practice into our business.  The principles behind what is now called the triple bottom line report were championed by our founders, Claude Stratford and Alan Bougen, long before the phrase itself was invented.”

Comvita’s international brand is built heavily on New Zealand’s image as an unspoilt source of natural health products, and the company understands the need to make sustainability issues integral to its business practice.

Hewlett says consumers across the world increasingly judge companies on their social and environmental commitment, and buy products accordingly.

“Investors are following similar principles.  We want to spread the word that good practices in economic, social and environmental sustainability can make a significant positive contribution to commercial, bottom-line results and Comvita’s growth is evidence of this.”

The company is involved with a number of environmental and social initiatives, both in New Zealand and globally.  Hewlett says the influence and conviction of founders Claude Stratford and Alan Bougen remain pivotal in Comvita’s business, in particular their philosophy that business must put something back into the community.

Last year in Tauranga, Comvita donated $15,000 worth of native trees to the Birds, Bees, Kids and Trees programme and a similar initiative is planned for 2006/07.  Sport and school primary school sponsorships, beekeeper scholarships, Otanewainuku Kiwi Trust, Project Green Fleet, The Life Foundation (India), Ben San Leprosy Centre (Vietnam), and Green Globe 21 are some other examples of social and environmental initiatives Comvita supports.
END

COMVITA LIMITED 2005 ANNUAL REPORT NEWS RELEASE

Natural healthcare products company, Comvita, has lifted its annual net profit after tax by 26% to $1.59 million.  This result was achieved on revenue of $31.3m, up 13% on 2004. A final fully imputed dividend of 3 cents per share has been declared, bringing total dividends to 5 cents (compared with 4.1 cents for 2004).

Comvita Chairman, Neil Craig, says the company achieved strong growth in all offshore markets with export revenue at 60% of total sales, now larger than domestic revenue for the first time.

“With EBITDA of  $4.09 million, margins were maintained at the operating level against a background of a continuing strong NZ dollar. This is testament to our strategy of ongoing strong marketing support for the Comvita brand and ownership of the distribution channels in all key markets.”

Comvita’s offshore growth has been spurred by a planned strategy to take greater control of its distribution channels. As part of this strategy, on
December 1, 2005, Comvita purchased its UK distributor (NZ Natural Foods) in order to increase its presence in the UK and launch in a very controlled manner into certain European markets.  In China and Taiwan, Comvita has made strong progress with the rollout of 20 Comvita-branded retail stores. These stores have been funded by local distributors, however all marketing is controlled by Comvita.

Subsequent to year-end, Comvita entered into a long-term exclusive licensing agreement for the Americas with Derma Sciences Inc, covering the manufacturing and marketing of certain patented wound care products.  This agreement, which involves taking a small equity stake in Derma Sciences in exchange for dedicated marketing spend, should result in wound care products being launched in the US in the second-half of 2006.

The Board of Directors appointed Neil Craig, the current executive chairman of ABN AMRO Craigs, as Comvita's new chairman in September 2005. Also appointed to the Board mid-2005 was business, marketing and innovation consultant, Dr David Cullwick. Former chairman, Bill Bracks, continues to make a significant contribution as a company director.

A new chief executive, Brett Hewlett, was also appointed in September 2005, along with the recent appointment of Dr Ralf Schlothauer as General Manager Technical.

Dr Schlothauer has global experience in new product development, including nutritional ingredients.  At Comvita, he is taking overall strategic and functional responsibility for research and development, including new product development.

According to Craig, CEO Brett Hewlett has already made his mark with the company with the development of a focused five-year growth strategy based on leveraging the brand and innovation in wellness products from natural source materials.

“The future looks very exciting for Comvita,” says Craig. “Brett has very quickly built an executive leadership group capable of delivering on the company’s 2010 strategy.”

Hewlett says the result is very good, given the currency issues and a flat domestic market.

“Sales for the first two months of this year have been significantly higher than the same period last year, and while it's still early days, provided the currency performs in line with predictions, we should beat both 2005 sales and profitability. This will be driven by sales increases in all export markets, margin improvement at the operating level and an increased contribution from our wound care division,” said Hewlett.   

“In order to achieve our growth targets, we need to continue to invest in our people. Plans are also underway for warehouse and factory expansions, and the completion of a new ‘Wellness Centre’. We have initiated a number of projects targeting strategic raw material supply, in anticipation of long-term growth in demand. We will also invest in retail merchandising assets and overall marketing spend. More details of these projects will be released later in the year as they progress.”

Appendix – Results

Year to 31 December 2005 (NZ$)	2004	2005
Group Revenue	27.6m	31.2m
Net Profit after Tax	1.26m	1.59m
EBITDA	3.64m	4.09m
Earnings per share	11.0c	12.3c
Dividend (fully imputed)	4.1c	5.0c

Final Dividend	3.0c
Ex date	14 April 2006
Payable date	28 April 2006
(Dividend Reinvestment Plan will apply.)

Natural health products company Comvita, the UK brand leader for Manuka Honey and other bee products, is introducing a ‘new look’ of stylish, vividly-coloured packaging. The rationale behind the packaging redesign was to create a more contemporary identity for the premium health products brand, and to classify its products into ‘families’, easily identifiable by consumers.

Key to Comvita’s brand imprint is the strong use of black (and gold). Each product family is colour-coded and introduces graphic reference to product origin and ingredients. For example, the Comvita Winter Wellness range, which includes products like Propolis Herbal Elixir and Lozenges, is now presented in orange and bright blue denotes Comvita’s Propolis Liquids range, including Extract, Tincture and Throat Spray. Comvita’s ‘new look’ packaging is just one step in the company’s strategy towards achieving greater brand presence on-shelf, and increasing brand awareness and market share in the UK and Europe. The refreshed identity will be rolled out across advertisements, posters, and a brand new exhibition display, created specifically for the Natural Trade Show, Brighton and Natural Products Europe this year.