Sweet profits for Honey Bun

Net profit at Honey Bun surged 221 percent above the 2020 June quarter to $65 million from just $20 million in 2020, with net profit for the nine months hitting $177 million for a 56 percent increase over $113 million earned in 2020.
Revenues rolled in for the quarter, with a 54 percent increase to $566 million, from $367 million last year and the nine months pulling in a 25 percent growth at $1.555 billion from $1.24 billion in the prior year. Export sales were up by 21 percent over the prior year,, the company revealed.
Gross profit for the quarter came in at $279 million, 61 percent over 2020, whilst the gross profit ratio closed at 48.3 percent, similar to the outturn in the prior year. Gross profit for the nine months came in at $751 million, 25 percent more than in the prior year, with $600 million with the gross profit ratio remaining consistent at 48.3 percent, as was the case in the prior year.
“The improvement was attributable to a number of factors, including the introduction of new products such as Cinnamon raisin loaf and the Hot dog roll,” Chief Executive Officer Michelle Chong and Herbert Chong, Chairman, advised shareholders in their management discussion and analysis report.
Administrative expenses increased 27.5 percent to $118.6 million $93 million in the June 2020 quarter, and for the nine months to June, the company incurred $335 million, up 21 percent from $277 million in 2020. Selling and distribution costs climbed 31 percent from $61 million in the June quarter in 2020 to $80 million and rose 9 percent to $208 million from $190 million in 2020. Taxation ended at $16.7 million from $2.6 million in the June 2020 quarter and jumped to $32.88 million for the nine months in 2021 from $17.75 million in 2020.
Gross cash flow brought in $230 million and ended with $259 million after working capital financing but ended with $78 million after addition to fixed assets of $84 million, $32 million for the acquisition of investments, loan payment of $4 and the payment of $59 million in dividends. The $84 million in capital expenditure was mainly used to upgrade the vehicle fleet to service new routes and acquire additional manufacturing equipment.
At the end of the quarter, Current assets ended with $574 million, including cash of $375 million and receivables of $82 million. Payables amount to $229 million and Net current assets ended the period $1.03 billion. Investments amount to $96 million at the end of the period, while Shareholders’ equity stands at $987 million, with borrowings at just $23 million.
Earnings per share came out at 14 cents for the quarter and 37 cents for the nine months. ICInsider.com forecasts earnings of 50 cents per share for the current year and 80 cents per share for 2022. The stock traded at $7.50 on the Junior Market of the Jamaica Stock Exchange on Friday with a PE ratio of 15 times, current earnings and is above the Junior Market average of 12.7 but lower than the average of 17 the market was valued at in March this year.
The company’s tax holiday for listing on the Junior Market expired May 2021; as such, all earnings from June 2021 will be fully taxed at 25 percent less any tax credits. The company is well managed and is poised for further growth; the stock can be scarce and may not be easy to get at the current price.