Comvita's shareholders are to receive a Christmas present of four cents a share, based on the Paengaroa-based honey products producer's half year result.

Comvita today announced a net profit after tax for the first six months to 30 September 2012of $2.386 million on sales of $45.4 million.

This compares to $2.578 million NPAT on sales of $41.8 million for the same period last year.

The fully-imputed interim dividend in respect of the first half year will be paid on 21 December 2012 for those registered on 14 December 2012.

'Comvita historically has a year of two halves with the second half year sales and profits significantly stronger than the first half,” says Comvita chairman Neil Craig.

'We expect this to be the case again this financial year as Asian sales continue to grow strongly.”

The directors are confident Comvita will deliver an increase in earnings for the full year. NPAT for the full year ending March 2012 was $8.224 million on sales of $95.9 million.

"This is a solid result when considering that the first six months is our quieter period and sales and earnings growth were constrained by raw honey supply,” says Neil.

'The growth of our business year to date in our key Asian markets is especially pleasing and this will be fully reflected over the coming months as we enter the peak season in these Northern Hemisphere countries.”

The US$1 million Medihoney milestone payment from Comvita's specialist wound care partner Derma Sciences, announced last week, is a capital payment and not included immediately in the operating profit.

'It is an indicator of how well medical sales are tracking, for which Comvita continues to receive royalty payments.”

Comvita's trading has been especially strong in China, South Korea and Hong Kong.

CEO Brett Hewlett says Comvita operates a predominantly direct-to-consumer retail business in Asia.

'We are much better equipped to take advantage of the continued growth in consumer demand for our unique, premium product offering.”

By comparison the trading environment has been relatively tough in some non-Asian markets, such as Australia and the UK, where Comvita sells through third party retail chains.

The general downturn in the economy and consumer confidence is resulting in an increasingly competitive environment for our retailer customers in those markets in particular, says Brett.

The other factor constraining sales growth and margins during the first half year is the short supply of Comvita's key ingredient, Manuka honey, says Brett.

The honey crop from last summer was well below average, because of generally bad weather during the summer of 2011/2012, which brought about a sharp increase in the purchase price for new season honey.

'Dealing with this constrained supply of Manuka honey resulted in priority allocation of available product across markets.

'The benefit of this targeted allocation of sales for our Manuka honey will have significant benefit during the second half year as we enter the Northern Hemisphere winter and the Christmas and Chinese New Year festive seasons."

In October, Comvita acquired a Whanganui-based bee-keeping operation. The Group now operates four apiary businesses across the North Island of New Zealand, which contribute approximately one-third of Comvita's total Manuka honey requirements.

'The balance of supply comes from contracted supply with beekeepers. Four years ago, all of the honey came from third party sources.

'An increase in security of supply of this raw material is a key strategic initiative for Comvita,” says Brett.

The announcement in September that clinical trials show Comvita fresh Olive Leaf Extract assists in slowing the onset of Type II diabetes provides a reason for a much larger consumer group to use the product all year round, says Brett. Consumers traditionally use the product to relieve symptoms of colds and flu.

'Comvita has demonstrated that even in a year with short supply of Manuka honey, we can still drive value for the business. We are well placed to take advantage of the Company's strong premium brand in key Asian markets.”

In June 2012 Comvita passed the milestone of $100 million in annualised sales, and remains confident that both top line and bottom line growth can be achieved for this fiscal year and beyond, says Brett.

Results for Announcement to the Market

Reporting Period 6 months to 30 September 2012

Previous Reporting Period 6 months to 30 September 2011

This report, including the results for the previous reported half year, is consistent with the unaudited interim financial statements of Comvita Limited for the six months ended 30 September 2012.

Consolidated Results:

Revenue from ordinary activities

Current half year $45,434

Up 8.7%

Previous reported half year $41,798

Profit from ordinary activities after tax attributable to security holder

Current half year $2,386

Down 7.4%

Previous reported half year $2,578 *

Net profit attributable to security holders

Current half year $2,386

Down 7.4%

Previous reported half year $2,578 *

* Restated from $2.212 million, refer to the Interim Financial Statements, note 18 for further details

2. Net Tangible Assets per Security

As at 30 September 2012 $1.21

As at 30 September 2011 $0.99