There's gold in them thar hills - with Honey

There's gold in them thar hills By Laurel Stowell 2:46 PM Tuesday Apr 26, 2016 Add a comment BOOM TIME: The price of manuka honey is soaring upward and beekeepers are looking to cash in. BIG HONEY businesses are buying up marginal rural land in the Whanganui region, rural real estate specialist Knuk Bukholt says. And the manuka honey boom - with wholesale prices upward of $26/kg for top grade honey - is driving up the per hectare price. Beekeepers buy the land to lock it up to protect the nectar supply for their bees. Values have more than doubled in some cases - land with native bush and punga sells for about $1200/ha, whereas accessible manuka scrubland has been fetching as much as $3000/ha. The biggest honey operators in the region are Tweeddale Apiaries, based in Taihape, Watson and Son, based in Masterton, Comvita/KiwiBee which has a base in Whanganui's Paul's Rd but started in the Bay of Plenty and Henry Matthews in the Waitotara Valley with a leased commercial property in Whanganui's Heads Rd. Conchita Tweeddale, of Tweeddale Apiaries, said the business was in the process of negotiating to buy three more properties.   Popular areas are the Waitotara, Ahuahu and Kauarapaoa valleys, and the Waverley backcountry, Mr Bukholt said. The higher prices have been a godsend for some sellers. "It's all that marginal country, which you would struggle to farm viably. It has been cheaper and young people have gone in and struggled." One property, Puketotara Station in the Ahuahu Valley, sold about three years ago for a figure in the millions. It was bought by a big apiary business. "No one else could afford that," Mr Bukholt said. Continued below. Related Content Comvita will pay a second interim dividend of 10 cents per share on June 24, taking the total for the 12-month period to 16 cents, ahead of 13 cents a year earlier. Photo / Bay of Plenty Times Comvita profits jumps 68pc as Aust becomes largest market Comvita is currently trading at $12, having gained 43 per cent this year. Comvita price target raised at Craigs on Australian, Asian growth prospects The honey boom has helped big apiaries get bigger. Tweeddale Apiaries started in Taihape in 1945 with 300 hives. Now it has 20,000 - with about 12,000 in the Taumarunui area and the rest spread across Whanganui and the Rangitikei. It produced 750,000kg of honey last year - 300,000kg of manuka and manuka blend and 350,000kg of clover honey. The manuka honey is sent away for testing, then offered to buyers in a tender process. The business is still expanding, Mrs Tweeddale said. It could grow to 43 beekeepers, most living in accommodation the family owns in Taihape. Five new beekeepers are expected from the Philippines, and more are being sought locally. They are trained by her husband Don, and Whanganui beekeeper Neil Farrer said his training was second to none. "There's only one standard. It's very high and it's very good." The biggest limit to the growth of their business was keeping good beekeepers, Mrs Tweeddale said. Her husband's training was so good other apiarists "pirated" their staff by making them better offers. Where there's big money there is often a criminal element. The Tweeddales have had 31 hives stolen, and can't claim insurance on them. Mr Farrer knows of 100 hives stolen in the Whanganui area in the last six months, and said some thieves were taking out honey frames and leaving hives behind. He's also worried all the hives out in the backcountry will be brought closer to town for the winter to be looked after. When that happens there will be overcrowding, with the risk of bee diseases being spread. There are other factors that could also take the gloss off the honey industry, he said. One was the influx of inexperienced beekeepers who don't know the law about hive registration, or how to watch out for and treat bee disease. Another was overseas sales of fake manuka honey, adulterated with sugar, putting off foreign buyers. And some who have joined the "gold rush" don't know manuka flowering is fickle, with one or two really good seasons every 10 years. This year was not a good season, because rain, cold and wind limited the nectar produced during flowering. "Older beekeepers know this and work accordingly, but the new chums have no idea." - Wanganui Chronicle   http://www.nzherald.co.nz/wanganui-chronicle/news/article.cfm?c_id=1503426&objectid=11628889

Comvita profits jumps 68pc as Aust becomes largest market By Tina Morrison 11:00 AM Tuesday May 10, 2016    Comvita Limited  Markets Comvita will pay a second interim dividend of 10 cents per share on June 24, taking the total for the 12-month period to 16 cents, ahead of 13 cents a year earlier. Photo / Bay of Plenty Times Comvita boosted annual profit 68 percent as Australian sales soared, overtaking New Zealand as the manuka honey company's largest market. Profit jumped to $17.2 million, or 43.36 cents per share, in the 12 months ended March 31, from $10.2 million, or 29.88 cents, the year earlier, the Te Puke-based company said in a statement. That's better than its November forecast for a profit of $15 million-to-$17 million. Its profit margin rose to 18 percent from 15 percent. The stock rose 2.1 percent to $12.25. Comvita shares have tripled in the past year, hitting a record high $12.40 last month, on demand for its naturally based products. Revenue increased 32 percent to $202 million as Australian sales jumped 62 percent to $65 million, helped by third parties buying the company's products to take to China, a phenomenon also affecting companies such as A2 Milk, Blackmores and Swisse.   Sales to Asia rose 38 percent. "We have grown really well in Australia and we've managed to do it without significantly increasing our cost base," chief executive Scott Coulter told BusinessDesk. "What's happening in Australia is a lot of Asian consumers are buying products and taking them home to friends and family and we have been right at the forefront of that trend. Australia has just stepped up." In New Zealand, sales slipped by $200,000 to $48 million although profitability rose as Comvita moved its manuka honey products away from lower-margin supermarket outlets and into higher margin tourism outlets. Continued below. Related Content Comvita's Scott Coulter. Photo/supplied Comvita achieves record profit Richie McCaw discusses Fonterra with his sister and brother-in-law, dairy farmers in North Canterbury. Photo / YouTube Richie recruited for Fonterra charm offensive Reserve Bank Governor Graeme Wheeler. Photo / Mark Mitchell RBNZ may hold off cutting interest rates until August, ANZ economists say "We were getting quite a lot of people going in and buying honey on deals and wholesaling it to Asia and so for us grocery was a lower margin business, so we simply diverted that honey as part of a global network into more profitable channels," Coulter said, adding the company's store at Auckland International Airport was benefiting from a record influx of Chinese tourists. The company has focused on securing a supply of its raw products, having tapped investors for additional funds to buy honey producers. The value of its raw material inventory jumped 94 percent to $53.6 million and Coulter said its inventories of honey were "in good shape" as it headed into the next year when it expects to be able to increase volumes and prices. "We haven't seen a lot of price resistance at a consumer level yet and I think we are pretty comfortable that we can do volume and price growth," Coulter said. Comvita derives about half of its sales from manuka honey and is diversifying its ingredients to include olive leaf extract and fish oil, as well as widening its product offerings with the help of chief innovation officer Sharon Hollenstein, who joined the company last month from milk processor Fonterra Cooperative Group. It's tapping into a US$3 billion global market for Omega-3 fish oil and demand for health benefits from its olive leaf products for diabetes and cardiovascular disease, which Coulter noted was the biggest killer in the western world. "We have got a couple of other things in the pipeline that we are working on at the moment and we definitely see part of our future as building some other legs we can stand on," Coulter said. Comvita has a five-year target to reach annual sales of $400 million by 2020. The company is changing its balance date to June 30, although it expects the 15-month operating result will likely be similar to the latest 12-month period given the June quarter is typically the quietest period due to the seasonality of sales. It will pay a second interim dividend of 10 cents per share on June 24, taking the total for the 12-month period to 16 cents, ahead of 13 cents a year earlier. A final dividend is expected to be paid in September based on the audited accounts for the period through June, it said. The latest annual earnings include a write-down of the company's shareholding in Nasdaq-listed Derma Sciences, although that's offset by the value of its options in fish oil refiner SeaDragon, it said. See Comvita's latest investor presentation here:  http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11636642

Comvita price target raised at Craigs on Australian, Asian growth prospects By Sophie Boot 3:30 PM Friday May 13, 2016   Comvita is currently trading at $12, having gained 43 per cent this year. Comvita is currently trading at $12, having gained 43 per cent this year. Comvita's price target has been ramped up by brokerage Craigs Investment Partners after the manuka honey company posted a 68 per cent jump in full-year profit on surging demand in Australia and China. On Tuesday, the company reported net profit of $17.2 million for the 12 months to March 31, as Australian sales soared, overtaking New Zealand as the largest market. Revenue increased 32 per cent to $202 million as Australian sales jumped 62 per cent to $65 million, helped by third parties buying the company's products to sell in China. The Te Puke-based company's shares have tripled in the past year, hitting a record high $12.40 last month, on demand for products such as manuka honey, which accounts for about half its sales, and olive leaf extract which makes up about 10 per cent. Adrian Allbon, an analyst at Craigs Investment Partners, lifted his 12-month target price for the stock by 43 per cent to $14.30, saying the company's market of Asian health & wellness and tourism, along with its strong growth outlook and a business model which is now demonstrating operating leverage, had led to the upgrade.   "Key highlights for us: profit growing faster than sales, lift in its dividend and a material increase in raw honey inventory to support 2017 growth," he said in a note. "Our key valuation change, however, is assuming lower capital intensity (both capital expenditure and working capital) to realise Comvita's stated sales target of $400 million by 2020. As a result, we have also raised our dividend payout to 45 per cent, and assume a 4 cent final [dividend] for 2016." Comvita is currently trading at $12, having gained 43 per cent this year. It joined the NZX5 0 in April after Diligent's exit, having been the second-biggest gainer on the NZX All Index in 2015, up 129 per cent to $8.40. The company is changing its balance date to June 30, although it expects the 15-month operating result will likely be similar to the latest 12-month period given the June quarter is typically the quietest period due to seasonality of sales. Comvita will pay a second interim dividend of 10 cents per share on June 24, taking the total for the 12-month period to 16 cents, ahead of its 13 cent payment a year earlier. A final dividend is expected to be paid in September. - BusinessDesk