Profit jumps 129% at Honey Bun

Honey bun 2Profit jumped 129 percent over the June 2014 quarter, after taxes for Honey Bun to $17 million for the June 2015 quarter and growth for the nine months period to $64 million versus $41 million, an increase of 58 percent, and cash flow from operation of $98 million from increased sales of 17.5 percent, to $672 million.
For the quarter sales grew 20 percent to $218 million from $181 million in 2014, whilst gross profit was up by a larger 24 percent. The company attributes the increase in sales to a strategic restructuring of the sales department. Gross profit margin increased to 45.5 percent up from 44 percent in the June quarter of 2015 versus 2014 and 44.9 percent for the nine months in 2015.
Export sales increased by 48 percent year to date. “The major increase in exports is as a result of our placement in ASDA stores in the UK” Michelle Chong, Chief Executive Officer said, in response to IC Insider.com enquiry, and is in keeping with the Company’s objective of increasing exports.
The problem in the past has been the last quarter with a tendency for lower sales and losses, is the company over this? “The company services a lot of schools and so the summer months are normally reduced due to the holiday season for July and August. We will always have this challenge but we have somewhat overcome a significant portion of it by way of the development of new products that are not directly geared for schools and by targeting other markets also. This has made a significant impact,” Chong stated in response to questions posed to her by IC Insider.com.
Hony BunLast year there were problems and added cost in the distribution department, it appears that the company is over that for 2015 fiscal. “We have outsourced over 50 of the distribution that was costing us excessively very successfully and last year we were also suffering from 2 of our major distribution vehicles being out of service and so we had to pay a lot for other vehicles to service the deliveries. These critical vehicles are now back in service” Chong said.
Honey Bun would have enjoyed savings in electricity and flour cost with the reduction of prices of oil and wheat on the world market. Chong agrees and indicated, “yes but besides the reduced rates we have also undertaken significant energy conservation on our own. We have also commenced the first phase of a large solar energy project”.
Receivables remained static at $56 million over June 2014 figure while Inventories fell to $45 million from $51 for the same period while payables were up to $59 million from $55 million. The company ended the quarter with $72 million in cash and investments, borrowed funds of $38 million and equity of $363 million. During the fiscal year a dividend totalling $11 million was paid more than twice the $4.7 million paid in the prior fiscal year.
IC Insider’s project a slight loss in the final quarter ending September this year with earnings for the full year to end at 66 cents versus 68 cents reported for the three quarters to June and 43 cents for the fiscal year to September 2014.

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  1. […] Honey Bun turned around a loss of $17 million in the September 2014 quarter into a profit of $4 million in 2015 and a profit of only $23 million into a one of $68 million for the 2015 fiscal year or earnings per share of 72 cents. The change came from a 22 percent rise in revenue in the quarter to $215 million from $169 million in 2014 and from a 19 percent growth in revenues for the full year, to $887 million from $747 million in 2014. The profit in the September quarter is a major achievement for the company it being the first time since 2012 when a small profit of $550,000 was realized that the company is reporting a profit. “The company services lots of schools and so the summer months are normally reduced due to the holiday season for July and August. We will always have this challenge but we have somewhat overcome a significant portion of it by way of the development of new products that are not directly geared for schools and by targeting other markets also. […]

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