Listed takeover target Comvita said it was on track to meet its full year earnings forecasts after reporting a $2.2 million net profit for the six months to September 30.
The result compared with a $2.2m net loss - mostly reflecting a $1.5 million one-off tax charge - in the previous corresponding period.
Comvita, which is the subject of a $2.50 a share takeover offer from Singapore's Cerebos Pacific, said its "normalised'' net profit - which was adjusted for items which it said were not reflective of the normal operations of the business - was $2.6m compared with a $0.4m profit in the previous corresponding period.
Sales in the six-month period were $41.8m, up 14 per cent from $36.6m a year earlier.
The company, which sells its Manuka honey-based products to 14 countries, said it was on track to meet the forecast for the full year ending March 2012 of sales in the range of $91m to $95m, up from last year's figure of $82m, and a normalised net profit of $7.3m to $8.2m, up from an actual net profit of $3.6m a year earlier.
The first half normalised net profit exceeded the company's September 14 guidance by about $400,000, largely as a result of strong sales over the September month.
The result was confirmation that the considerable investment Comvita had made over the last few years was starting to deliver for shareholders, the company said.
Comvita's board has said Cerebos' $72m bid is opportunistic and unwanted. Chairman Neil Craig told a conference call today that the position had not changed.
"It undervalues the company by considerable margin, which is a nice way of putting it,'' Craig said.
Comvita has advised shareholders to not to accept the offer and to await the delivery of the target company statement, will include a report from consultants, Grant Samuel, next week.
Positive trading activity in all key markets combined with ongoing operational improvements had delivered sales and earnings significantly better than the previous two years, the company said.
Craig said the second half year results for Comvita have historically been significantly stronger than the first half, and that he expected this to again be the case again this financial year.
Comvita announced an interim dividend of 4c a share. The company did not pay a half year dividend last year.
Shares in Comvita have consistently traded above the offer price. The stock traded today at $2.85 a share, up 5c from Monday's close.
