August 13, 2020
For the nine months ended June 30, 2020, Honey Bun (1982) Limited reported revenues of $1.24 billion, 6% up from $1.17 billion reported a year ago. For the quarter, revenues dropped by 7% to $367.42 million (2019: $394.49 million). HONBUN noted, “The revenue decline was mainly due to many customers in various distribution channels either being closed or significantly reducing their operations.”
The Company had a 6% increase in cost of sales to close at $643.37 million (2019: $604.43 million). As such, gross profit went up 6% or $34.50 million year-to-date to $600.03 million relative to $565.54 million reported in the prior corresponding period. Gross profit for the quarter amounted $174.04 million (2019: $188.98 million).
The Company documented other gains for the nine months ended June 30, 2020 totaling $2.51 million relative to gains of $5.17 million for the similar period in 2019. Furthermore, for the quarter, Management noted, “other Income comprising fair value gains on quoted securities and exchange gains on foreign currency denominated assets amounted to a gain of $4.2 million compared to a loss of $1.9 million in the prior year.”
Administrative expenses rose 19% to $275.36 million (2019: $231.56 million) for the nine months, while selling, distribution and promotional expenses increased 1% to $191.50 million (2019: $190.32 million). Total expenses for the nine months amounted to $466.87 million, 11% above the $421.87 million recorded for the same period of 2019. For the quarter, total expenses closed at $153.96 million (2019: $153.69 million).
The increased expenses year to date resulted in a 9% decline in profit from operations from $148.83 million in 2019 to $135.68 million for the period under review. Operating profit for the third quarter amounted to $24.34 million compared to $33.44 million reported for the same quarter in 2019.
Finance income totaled $808,693 (2019: $1.04 million), while finance costs rose 13% to $6.08 million (2019: $5.38 million).
As such, profit before taxation closed the period at $130.41 million versus $144.49 million booked in the same period last year. Pretax profit for the quarter amounted to $22.85 million (2019: $32.33 million).
Taxation for the nine months amounted to $17.75 million (2019: $18.78 million), thus resulting in net profit after taxation of $112.66 million (2019: $125.70 million). For the quarter, net profit increased to $20.24 million compared to $16.69 million reported in the previous comparable quarter.
Consequently, earnings per share (EPS) amounted to $0.24 (2019: $0.27) year to date, while for the quarter the EPS amounted to $0.04 (2019: $0.04). The trailing twelve months EPS is $0.30. The number of shares used in this calculation was 471,266,950 shares. HONBUN last traded on August 13, 2020 at $5.10.
Balance Sheet at a Glance:
As at June 30, 2020, total assets increased by 19% to close at $1.02 billion (2019: $870.94 million). The increase was largely due to increases in ‘Cash and Cash Equivalents’ and ‘Property, Plant and Equipment’ which closed at $234.73 million (2019: $147.52 million) and $568.80 million (2019: $501.80 million), respectively. ‘Inventories’ also contributed to the increase closing at $93.78 million (2019: $69.30 million).
Shareholders’ equity totaled $829.61 million compared to the $729.68 million quoted as at June 30, 2019. This resulted in a book value of $1.76 relative to $1.55 the prior year.
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