Comvita Limited, Annual Meeting 2025

7 December 2025

Comvita Limited (CVT)

The company will hold its Annual Shareholders Meeting at 2.00pm Wednesday 17 December 2025.

The location is Pāpamoā Surf Life Saving Club, 561 Pāpāmoa Beach Road, Pāpāmoa.

You can also join the meeting online at this link.

Company Overview

Comvita was founded in 1974 and listed on the NZX in 2003. It is a producer and distributor of Manuka Honey products. It has offices in China, North America, Europe, Hong Kong, Japan, South Korea, Singapore, Australia, and New Zealand.

In February 2025, the company announced that as a result of accounting irregularities the FY23 net profit has been reduced by $1 million and the FY24 net profit by $3 million.

In May 2025 Luke Bunt resigned from the Board and in August 2025 Karl Gradon was appointed CEO. Zhu Guangping, a non-independent director by virtue of shareholding, will retire from the Board at the ASM.

Scheme Vote and Consequence

In August 2025, the company announced it had entered into a Scheme of Arrangement with Florenz Ltd, a subsidiary of Masthead Ltd, a company associated with Christchurch businessman Mark Stewart. Florenz Ltd offered 80 cents per share a 67% premium on the price the shares were trading for immediately prior to the offer. Comvita’s two largest shareholders who hold a total of 18.3% agreed to the offer. While recognising the “bottom of cycle” nature of the offer, NZSA voted undirected proxies in favour of the resolution considering it in the best interests of minority shareholders in the medium term and the significant execution risk in restoring Comvita’s margins.

The resolution did not receive sufficient support.

The Board is now likely to be examining recapitalisation options with $59 million of bank debt due to be repaid in early 2026. At the time of writing the shares were trading at 49 cents, down 39% on the offer price.

NZSA’s concern now shifts to the methodology surrounding a future re-capitalisation. For example, if capital were to be raised by a discounted Placement (admittedly likely to require shareholder approval), minority shareholder will be heavily diluted, with a transfer of future wealth accruing to those few shareholders favoured in any placement structure.

We encourage the Board to consider the wider shareholder base in any recapitalisation proposals.

Current Strategy

The Board has yet to articulate the strategy beyond the need to raise capital in the short term. This is unsurprising in the context of the immediate priorities facing Comvita.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. Both the Chair and the Acting CEO spoke of the difficulties of a disappointing year.
2. Comvita is concentrating on decreasing costs and its inventory.
3. It is conscious of changing consumer preferences, especially in China and the U.S.A.

The meeting report is available at this link.

Disclaimer

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  The company does not disclose if it offers share options to Directors nor whether Directors are entitled to special exertion benefits within the fee pool.

Director Share Ownership:  Directors are not required to own shares.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. There is no separate Remuneration Committee, with remuneration governance falling within the remit of the whole Board.

Incentives: The CEO is paid a short-term incentive (STI) in cash.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the NZX Remuneration Reporting Template.

The STI is awarded at a target of 50% of base salary. The measures, weightings, and level of achievement against each component are not disclosed. The NZX Code of Corporate Governance requires the CEO remuneration is fully disclosed.

The company discloses the CEO/employee remuneration ratio but not the gender pay gap.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

Director Independence:  A majority of Directors are independent.

Board Composition: The Annual Report include a skills matrix that attributes skill sets to individual Directors to demonstrate how they contribute to the governance of the company.

The nature of the company’s board indicates a commitment to thought, experiential and social diversity, with relevant experience for Comvita.

We note the company has participated in the IoD’s Future Director Programme designed to develop and mentor the next generation of NZX Directors.

Despite our favourable assessment of Board Composition disclosure, we consider that further Board change is likely, given the outcome of the Scheme vote – a vote championed by the existing Board. Already, a Resolution to elect an additional director has been proposed for this shareholder meeting.

Regardless of future changes, NZSA encourages the company to maintain a high level of disclosure as to how each director adds value to the company. We continue to support Boards with a balance of required functional and professional experience. In this context, we note and appreciate the direct experience of two of the Independent Directors within related primary sector industries.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Director appointment dates range from 2019 to 2023.

ASM Format: Comvita Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management:  NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see Boards are across their risk management responsibilities.

The Board Charter states clearly that Board members can seek external or internal advice (at the expense of the company, with the approval of the Chair) to support decision-making. We note the Audit & Risk Committee approves the internal audit plan and can seek internal or external advice to support as required. The Board Charter also states that Board members “have access to the advice and services of the Secretary for the purposes of the Board’s affairs and the business.”   

The company offers good disclosure of financial risks and discloses a materiality assessment covering its core strategic risks. There is some disclosure as to risk management processes in the Annual Report, with commentary on business and operational risks provided in the Chair and CEO reports. 

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. The appointment date of the Lead Audit Partner is not disclosed. The report notes that KPMG was appointed audit firm in 1998.

Whilst NZSA understands the constraints around audit firm rotation we would expect to see some disclosure around how the company evaluates the audit firm and ensures audit fees are appropriate.

Environmental Sustainability

Overall approach: NZSA notes that Comvita’s FY2025 Climate Statement demonstrates continued improvement in the quality and scope of disclosures, reflecting growing maturity in integrating climate resilience into long-term business strategy. The company’s ongoing B Corp certification further reinforces its commitment to strong environmental standards.

Comvita’s large-scale native Mānuka reforestation programme, now spanning nearly eight million trees, delivers biodiversity and soil benefits. Its focus on bee and pollinator health remains central to operations, supported by ongoing research into hive resilience and disease prevention. Through community and Māori partnership projects, Comvita also advances broader nature and ecosystem restoration goals.

Sustainability Governance: The company discloses a skills matrix that identifies each director’s expertise, with “Sustainability” included as a core capability. Climate oversight resides within the Audit and Risk Committee, supported by the Safety and Performance Committee, and operationally managed by a dedicated Sustainability Steering Group. Management accountability is demonstrated through defined reporting lines and monthly performance reviews.

Strategy and Impact: Comvita’s strategy demonstrates awareness of both transition and physical climate risks. The company’s scenario analysis models long-term resilience under different warming pathways, with implications for honey yield, asset integrity, supply-chain continuity, and market access. FY2025 marked progress toward a structured transition plan, with emphasis on carbon reduction and operational efficiency. The company continues to leverage its Mānuka forest assets as both a carbon sink and a source of biodiversity co-benefits, showing how nature-based solutions are integrated into its business model.

Risk and Opportunity: Comvita provides disclosure of climate-related risks and opportunities, including impacts on production and market positioning. Management responses are detailed and measurable, such as geographic diversification of hives, investment in resilient infrastructure, and supplier engagement on Scope 3 emissions. The risk-identification process is transparent and embedded within the broader enterprise-risk framework.

Metrics and Targets: The company discloses quantified GHG emissions for Scopes 1, 2, and 3, with multi-year comparative data. Comvita has set near-term science-aligned targets to reduce gross GHG emissions by 42% by 2030 (from a 2022 baseline) and achieve net-zero by 2050. FY2025 emissions fell approximately 40% versus FY2022, reflecting strong early progress, although some reduction was attributed to lower production volumes. The company continues to refine its Scope 3 data and plans to seek Science-Based Targets initiative (SBTi) validation.

Assurance: KPMG provided limited assurance over the FY2025 GHG inventory covering all Scopes. NZSA encourages Comvita to extend this assurance scope in future years to encompass broader climate-related disclosures.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  Whilst donations are disclosed in the Annual Report NZSA expects an explicit disclosure as to whether political donations are made.

Financial & Performance

Comvita’s share price fell from $1.15 to $0.76 (as of 22^nd October 2025) over the last 12 months – a 34% decline. This compares unfavourably with the NZX 50 which rose 4% in the same period. The capitalisation of CVT is $54m placing it 85^th out of 115 companies on the NZX by size and makes it a mid-sized company.

¹ per share figures based off actual shares at balance date (not weighted average)

2025 was a continuation of the woes experienced in 2024. The company pursued a Scheme of Arrangement (see above), but this was ultimately rejected. The share price continued to decline, after more large write-offs were completed.

Revenues were down 6% to $192.4m, but cost of sales increased 19% to $109.7m contributing to a much-reduced Gross Profit Margin of 43%. This margin squeeze meant that Gross Profit fell drastically to $82.7m.

NPAT was -$104.9m, on the back of impairments (non-cash) of $57.4m. EPS was -$1.49.

Note 19 on pages 79-85 of the financial statements provides more detailed information on these impairments and how they were derived. These impairments also impact NTA materially. NTA per share fell to $0.78 and this was just below the Scheme of Arrangement price. We do note that valuations of assets were completed on a going concern basis.

Operating Cashflows were very positive at $34.1m. Inventory levels declined markedly from $134m to $89m as this asset was also impaired, but the inventory turnover ratio increased to 0.98.

The balance sheet is in a parlous state. We note that borrowings of $47.1m are all regarded as current, yet the company does have a positive current ratio of 1.66 which is an improvement on last year. We also note that the main current asset is inventory. Cash at bank is $9.0m. The debt-equity ratio has risen alarmingly to 2.16 on the back of lower equity (impairment of assets), rather than higher debt levels.

Unsurprisingly, the payment of dividends was suspended.

The company released an investor presentation in conjunction with their annual results. Multiple pressing items were considered and “The Directors have carefully considered the ability of the Group to meet its liabilities as they fall due and concluded that the Group will continue to operate as a going concern”.

Li Wang is the largest shareholder, holding 12.13% of CVT.

Resolutions

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Bob Major was appointed to the Board in September 2019. He spent the majority of his career in various roles within the New Zealand dairy industry, working for Fonterra, the New Zealand Dairy Board & the New Zealand Dairy Research Institute. He has held global leadership roles for Fonterra in strategy, mergers & acquisitions, ingredients sales and marketing and innovation. He has held regional leadership roles in the Middle East, Hong Kong & China, and was on the senior leadership team of both the New Zealand Dairy Board & Fonterra. Bob is Chair of Gibbs Holdings (Nelson) Ltd & Armer Group Advisory Board. He is also a director of BioVittoria and Dairy Holdings Limited. He is a member of the Oriens Capital Investment Committee. Bob is a past Chair of The Mud House Wine Group & has been a Director of Westland Milk Products, Sealord Group, Kiwirail & Barker Fruit Processors. Bob is a Chartered Fellow of the New Zealand Institute of Directors.

NZSA notes and appreciates Major’s primary sector experience in considering this resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

The Notice of Meeting notes “Greg Barclay has been nominated by Mr Alan Bougen in accordance with the Director nomination process. Having only received Greg Barclay’s nomination on 18 November 2025 (the day prior to publication of this Notice of Meeting), the Board is unable to make an assessment as to whether or not Greg Barclay would qualify as an independent director (as defined in the NZX Listing Rules), as it does not have sufficient information to do so.”

He is a founding partner of Claymore Partners, a specialist legal and commercial advisory firm, and a governance professional with experience across the commercial, legal and sports sectors. He currently serves as Chair for NZX and ASX listed Smartpay Holdings Limited and is a director of several private companies including international trading company Pacific Forest Products and leading New Zealand environmental consultancy Boffa Miskell.

Greg is also a current director of New Zealand Rugby and a past Chair of both New Zealand Cricket, and the Dubai based International Cricket Council. He is a barrister and solicitor of the High Court of New Zealand and a Chartered Member of the New Zealand Institute of Directors. Greg holds a LLB from the University of Canterbury and a post-graduate DipBus from the University of Auckland.

NZSA notes the nomination proposed by Alan Bougen, a key opponent of the Scheme proposal. In the context of the Scheme vote being rejected by shareholders, we consider this Resolution appropriate in supporting the Board in improving its relationship with key shareholder groups, while also adding to the professional skills pool on the Board.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://nz.investorcentre.mpms.mufg.com/voting/CVT

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 2.00pm Monday 15 December 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA