Paengaroa honey products marketer Comvita produced a strong turnaround result of $5m after tax profit and a long awaited resumption of dividends totalling eight cents per share fully imputed for the year ended March 31.

"We also reduced net borrowings from $30.3m to $11.5m from retained earnings, inventory reductions and the sale to Derma Sciences of the global rights to the Medihoney range to the professional market," says board chairman Neil Craig.
Since 2005 the company has diversified its product mix away from a high dependence on manuka honey and transformed the business into a profitable global marketer of high-end natural products from New Zealand.
"The board acknowledges the outstanding effort made by the executive to produce such a result in what were very challenging economic times," says Neil.
A long standing dispute with WaikatoLink, the commercialisation arm of Waikato University was resolved after the balance date.
"Though we won our case under the Fair Trading Act regarding misleading conduct in the negotiations leading up to the purchase of IP from WaikatoLink, we were still required to pay $1m of the $2m outstanding," says Neil.
"This does not impact profits, but does have a balance sheet impact as we were required to write a cheque to WaikatoLink - this trying issue is now behind us."
This year Comvita is involved in a court case in the UK defending a key medical patent.
Comvita expects to win, but there is a high cost of time and money which will impact the current half year.
"While we have had two such cases in the last year, our approach is always to sort disputes out by way of negotiating and if necessary, mediation," says Neil.
"When it involves intellectual property or patents around key products, we will be required from time to time to go down the legal route."
Comvita's result for 2011 will be weighted heavily to the second half of the year and the Northern Hemisphere winter season, says Neil.
"It is already clear the market environment at this time is generally more sluggish than we had anticipated. The first three months of this year have been impacted by a slower start to the Southern Hemisphere winter, with no repeat of last year's 'swine flu tailwind'."
The continued resurgence of the NZ dollar against all currencies and in particular, the UK pound is making it extremely difficult for Comvita to 'turn a profit' there, says Neil.
An online copy of the Comvita Limited 2010 Annual Report and a downloadable version of the AGM presentation is available at: www.investor.comvita.com