Profit is on the up for Paengaroa based global natural health and beauty products company Comvita.

For the six months to September 2011 Comvita's net profit after tax rose to $2.6 million from $392,000 for the same period in 2010.

Sales in the six month period rose 14 per cent to $41.8 million from $36.6 million and were up by 18 per cent in local market currency terms.

The result exceeds guidance given on September 14 for a normalised half year NPAT of $2.2 million and sales of $41 million as a result of strong September sales.

Comvita chairman says this result is confirmation that the considerable investment Comvita has made over the last few years is starting to deliver for shareholders.

'This is a strong result. Positive trading activity in all key markets combined with on-going operational improvements has delivered sales and earnings significantly better than the previous two years.

'As a result of this positive performance we announce a fully-imputed interim payment of four cents per share in respect of the first half year, payable on 16 December 2011.”

Unadjusted NPAT rose to $2.2 million in the six months to September 2011, up from a loss of $2.2 million in the same period last year.

One-off costs in the first half of the 2011 financial year included a $1.5 million tax charge due to changes in building depreciation rules and costs associated with defending a key wound-care patent.

Comvita chief executive Brett Hewlett says the progress made in recent years is providing a positive outlook.

'Comvita has over the last five years invested to build the infrastructure required to support a high-growth international company.

'We have strengthened our distribution networks in international markets, particularly Australia and Asia.

'We have also invested heavily in research and development, new product development and the Comvita supply chain – particularly in the sourcing of Manuka honey.

'We sought to put in place a cost structure and a business model that will allow our earnings to grow ahead of our expected growth in top-line sales.

'The initiatives are all starting to deliver the desired improvement in net earnings.

'The positive results of this investment are evident in the 18 per cent rise in gross profit for this six month period to $23.5 million from $20.0 million and a five per cent rise in operating expenses to $19.9 million from $19 million.”

The second half year results for Comvita have historically been significantly stronger than the first half and we expect this to be the case again this financial year.

Brett says Comvita is on track to meet the forecast for the full year ending March 2012 of sales in the range of $91 million to $95 million (FY 2011: $82 million) and a normalised NPAT of $7.3 million to $8.2 million (FY 2011: $3.6 million).