Comvita Limited

Comvita did not give revenue, EPS, or gross margin for the period in the prepared remarks, but management said H1 FY26 delivered solid performance and improvements across key financial metrics. Mandy Tomkins-Dancey said inventory was reduced to $68.3 million at 31 December 2025 from $145.8 million at December 2023, cash conversion cycles improved from 484 days to 239 days, and net debt fell to $48.7 million from $62.4 million at the end of FY25 and $81.6 million a year earlier. She also said transaction costs of $1.4 million were included in H1 FY26 results. Full-year FY26 guidance was maintained at normalized EBIT of $14.3 million, or $13.5 million pre-IFRS 16. In Q&A, Mandy said gross margins are expected to return to around 51% in the medium term. Management said H2 still includes important seasonal and commercial drivers, with U.S. club retail currently in line with forecasts, the manuka season expected to be okay and yields likely in line with baseline assumptions, and Lunar New Year sales not yet known.

Karl Gradon framed the half as evidence that Comvita’s turnaround is taking hold, citing continued debt and inventory reduction, stronger execution, and benefits from new sales strategies in China, the U.S. and Southeast Asia. He repeatedly emphasized disciplined execution, stronger leadership capability, and a sharper focus on brand differentiation, innovation, and channel diversification. His tone was confident but pragmatic: the business is improving, but he stressed that the work is ongoing and the next six months require “ruthless execution.”

Mandy Tomkins-Dancey emphasized that H1 benefits came from strong U.S. club retail wholesale performance, disciplined cost management, and flow-through from FY25 cost-out actions such as procurement, formulation and freight efficiencies, leadership streamlining, and staff reductions. She highlighted that inventory normalization and sell-through of excess stock drove the cash conversion cycle improvement from 484 days to 239 days and helped reduce net debt to $48.7 million. She said the company expects gross margins to return to around 51% in the medium term, and that full-year normalized EBIT guidance remains $14.3 million, or $13.5 million pre-IFRS 16. She also noted that further working capital benefits in H2 are not expected to be as large as in H1.

Analysts focused on the dividend outlook, dilution from the recapitalization, U.S. sales durability, FX risk, inventory levels, and seasonality in gross margin and sales. Bridget Coates said a dividend remains a priority, but not something the board is considering in the near future because recapitalization and balance-sheet repair come first. On dilution, she said no exact outcome can be stated yet, though the board is mindful of protecting existing shareholders and the intended underwriting level is $0.80 per share. Karl Gradon said U.S. growth remains supported by low household penetration and a retail footprint that matches Comvita’s target demographic, while FX risks are being managed prudently under the hedge policy. He also said H1 club-channel strength was helped by winter seasonality and should soften in summer, while the full-year assumptions for U.S. growth and margins remain on track.