Review will look at splitting Comvita business

Comvita is reviewing its structure and may split off its food-making businesses from its marketing arm.

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Comvita is reviewing its businesses as it heads for a full-year loss of $6m.
Photo: Photo / 123RF

The honey producer said the review would include underperforming businesses, structural, balance sheet, leadership and organisation considerations.

“Specifically, the sub-committee will examine the possibility of a more formal separation between the ‘brand’ and ‘supply’ components of the business,” it said.

The review will be led by director and former chief executive Brett Hewlett and supported by external advisors.

The outcome of the review will be disclosed at the annual shareholder meeting on 17 October, and would seek the necessary approvals to go ahead with recommended structural changes.

Last month the Te Puke-based company warned it was headed for a full year loss of $6 million, because of bad weather, competition for suitable Mānuka sites for hives, and new standards for what constitutes Mānuka honey.

It was the company’s third consecutive poor harvest, which was described as extremely disappointing.

Comvita shares have gained 7 percent after news of the review.

Meanwhile, chief executive Scott Coulter is to step down in September, following 16 years with the company – four as the chief executive.

He has been credited with helping the company establish itself in its main market China in recent years, culminating in the recent full ownership of the business which distributes its products there.

“Scott has fostered the relationship with our Chinese partners over the past 16 years and has been a key driver of Comvita’s success in the China market,” said chair Neil Craig.

Turnover in the China business was expected to quadruple in size in coming years to about $200m a year.

Published at Thu, 06 Jun 2019 05:25:13 +0000
Source: Review will look at splitting Comvita business