Final Call for Comvita

Comvita Ltd. looks likely to pass into the ownership of health food company Florenz, pending a December shareholder vote. That left one last set of full-year accounts to present as leadership fronted a video call on August 29 to report continued losses and asset writedowns.

By Bruce Roscoe

Comvita Ltd, in reporting results to the year to June 2025, disclosed operating and pretax losses of NZD29.0m and NZD94.4m to NZX on 29 August. Asset writedowns amounting to NZD53.9m featured prominently in the results, and followed writedowns of NZD64.2m in the previous year.

Fronting a public video call from Comvita and presenting year-end financial results on August 29 are, from left, recently appointed Comvita CEO Karl Gradon, board chair Bridget Coates and director Mike Sang.

To borrow from sports jargon, the results are a dead rubber. The NZ80c per share offer in the Florenz Ltd takeover bid for Comvita announced on 18 August does not change. The earlier winner-takes-all match was played in private between Comvita and Florenz over six months from February.

Beekeepers can be expected to note changes in Comvita balance sheet entries for “biological assets” — specifically, bees and hives. Operational hive numbers reduced 7.2% to 15,983 but the value of bees was stated at NZD1.3m, a decrease of 69.7%. The value per hive was marked down 70.0% to NZD63. (All comparisons between values at 30 June dates in 2025 and 2024.)

Looking beyond the hives, shareholders have witnessed an extraordinary evaporation of value, based on balance sheet data recoded since June 2023 when shareholders’ equity (which amount equals net asset value) was calculated at NZD239.3m. The value recorded at June 2025 collapsed 77.1% to NZD54.9m, or NZ78c per share, which explains Florenz’ offer of NZ80c per share. Florenz has offered to pay shareholders for the book value of Comvita’s assets. Brand value for the world’s flagship mānuka honey producer is discounted to almost zero.

Comvita’s year to June 2025 financial summary.

Comvita’s financial statements again are marred by restatement. Profit and loss data for the June 2024 year are restated as are balance sheet data for the June 2024 and 2023 years. Understanding the restatements demands too many hours from short lives.

The statements bear no relevance to current shareholders and may not impact Florenz. Auditors KPMG wrote in Comvita’s June 2024 annual report, “The carrying amount of the group’s net assets as at 30 June 2024…significantly exceeded its market capitalisation of NZ76.5m and is considered an indication of impairment” (or reduced asset value).

Which was to say, “Because Comvita’s stock market value fell, the assets that it owns must be worth less, therefore we’ll write them down in the next set of accounts”. Activist shareholders could have contested that position, considering that general market malaise or selling in an illiquid market or an earnings disappointment could have caused share price weakness. As a privately held company, Florenz does not need to apply such cart-before-the-horse accounting alchemy, but it may be thankful that KPMG did.

On the morning of the results announcement, Comvita held a web-based call intended for analysts and journalists but open to any who cared to call in. Chairperson Bridget Coates, chief executive officer Karl Gradon, and director Mike Sang, fronted the call. The quality of their communication and level of disclosure was excellent. But they were speaking to two audiences —shareholders on the one hand, and employees on the other.

Shareholders in effect are presented with a doomsday scenario in the event that they resist the offer of NZ80c per share. Employees are encouraged by signs of a recovery — “tangible progress is evident”, the investor presentation assures. While showing shareholders the door, Comvita is at pains to reassure employees in their own and the company’s value so that they remain in the building for the benefit of the new owner.

As a publicly quoted company, Comvita must report to NZX not only its earnings results but also events that are likely to impact its business. Comvita’s financial statements and annual reports provide a widescreen view of the company’s activities throughout the world and also a window on many facets of the mānuka honey industry. Under the proposed new ownership, that view will blacken and the window close. And the call of 29 August will become the final call.