Comvita Limited

Comvita did not give a revenue or EPS figure in the prepared remarks, but it reported that H1 FY26 delivered improvements across key financial metrics. Mandy Tomkins-Dancey said H1 cost savings were achieved despite $1.4 million of transaction costs, inventory fell to $68.3 million from $145.8 million at December 2023, cash conversion improved from 484 days to 239 days, and net debt was $48.7 million versus $62.4 million at FY25 year-end and $81.6 million a year earlier. The company reaffirmed full-year FY26 normalized EBIT guidance of $14.3 million, or $13.5 million pre-IFRS 16, unchanged from the ASM. Gross margin guidance was said to remain in line with prior disclosures, with expectations of around 51% in the medium term.

Karl Gradon said the company has made significant progress over the past 6 months and is focused on disciplined execution, diversification, and restoring sustainable growth. He emphasized that Comvita is strengthening its premium positioning, expanding innovation beyond core honey products, and improving leadership, cost structure, and risk management. He was upbeat on North America, where club retail is helping the brand reach the right consumer and where he still sees room for growth because household penetration remains low.

Mandy Tomkins-Dancey focused on the financial reset: stronger U.S. club retail performance drove volume, sales, profitability and overhead recovery, while cost-out actions from FY25 continued to flow through. She cited $1.4 million of transaction costs, inventory down to $68.3 million from $145.8 million, cash conversion improving from 484 days to 239 days, and net debt at $48.7 million. She said further working capital improvement should not be expected to the same degree in H2, and reiterated full-year normalized EBIT guidance of $14.3 million, with gross margins expected to return to around 51% in the medium term.

Analysts focused on the dividend outlook, dilution from the recapitalization, FX risk, the sustainability of U.S. club retail growth, gross margin recovery, and whether the strong inventory reduction was driven by genuine operating cash flow or inventory sell-through. Management said a dividend is a priority eventually, but not for the near term, and said it could not yet quantify dilution because the capital raise terms are still being finalized. On margins, Mandy said gross margin is expected to return to around 51% in the medium term, while Karl said U.S. growth still has room to run but H1 is likely to be softer seasonally than H2. On FX, Karl said hedging is in place and he does not expect surprises this financial year.