Honey Bun sweetens earnings with 71 per cent increase in 3Q profit
Honey Bun CEO Michelle Chong said the performance is due to increased capacity from the company’s plant and machinery upgrades.
By Claude Mills
Local baking company Honey Bun heated up an already hot summer with a net profit of $16.7 million for the third quarter ended June 30, 2019, a sizzling 71 per cent increase compared with the corresponding period last year.
The quarter’s revenues of $394.4 million were up 19 per cent over the comparative quarter, which Honey Bun CEO Michelle Chong said is due to increased capacity from the company’s plant and machinery upgrades.
With the increased capacity and upgrades came an introduction of a new line of products during the quarter.
“In June, we introduced a new line of burger buns, the Shorty burger bun, packaged for the retail sales market. The product is doing well and we look forward to further build out of this line,” Chong said.
The company also sweetened the deal for consumers with the rollout of new eye-catching packaging on its primary products.
“We will give them a new look and feel, but the same deliciousness our customers have come to know and enjoy. We are very optimistic about the future, and continue to build on our capacity and business intelligence to meet the opportunities ahead,” Chong added.
Gross profit of $189.0 million was up 29 per cent during the review quarter, whilst the gross profit ratio closed at 47.9 per cent, compared to 44.1 per cent in the prior year.
Operating expenses were $153.7 million, a 12 per cent increase over the comparative period. Profit before tax for the quarter was $32.3 million, or 258 per cent more than the same period last year.
According to Honey Bun's report on its financial performance, for the nine-month period, total revenues amounted to $1.17 billion, or 16 per cent over the prior year, whilst gross profits were $565.5 million or 24 per cent over the same period last year.
Operating expenses of $421.9 million were up 15 per cent over the prior year, due mainly to increased sales and marketing spend as well as staff training and development costs. Export sales for the nine months increased by 157 per cent over the prior period.
Total non-current assets of the company at the end of the period stood at $589.4 million, a $69.5 million increase over the same period last year. Of this amount, $54.8 million was due to spend on property plant and equipment. Total cash and cash equivalents were $147.5 million, or $63.4 million over the prior year, whilst shareholders’ equity closed the period at $729.7 million or 22 per cent over the prior year.
At a board meeting held on June 12, 2019, the Board of Directors approved a dividend of $0.03 per share, payable on July 9, 2019, to shareholders on record at June 25, 2019.