Jamaican bakery Honey Bun reported 50 per cent higher net profits in financial year 2012.
Honey Bun posted profit-after-tax of $41.5 million for the year ended September 30, 2012, compared to $27.6 million over the prior financial year. Pre-tax profit was up by 13 per cent at $41.9 million.
Revenues jumped by nine per cent to $611 million year-on-year.
Krystal Chong, marketing manager at Honey Bun, said the company is pleased with the results.
“Other contributing factors include; managing costs and creating efficiencies, increase in export, a results focused board and executive team and new sales strategies in adapting to a changing economic climate,” she told Caribbean Business Report yesterday.
Honey Bun is the dominant player in the Jamaican “individually wrapped baked snack” market, and its products are sold in more than 1,000 outlets islandwide, including gas stations and 250 school canteens.
Total expenses increased by 15 per cent to $227 million in financial year 2012 compared to the year prior. Administrative expenses were up by 12 per cent while selling and distribution costs were 22 per cent more than last year.
In order to control costs, the company earlier this year said it was moving towards improving on efficiencies and capitalising on economies of scale — strategically designing new products for new revenues and increasing automation to improve efficiencies on the line.
Founded 30 years ago by the Chong family, Honey Bun listed on the Jamaica Stock Exchange Junior Market last year, with its initial public offering being over-subscribed four times the targeted amount of $50.8 million.
The company planned to use the funds raised to invest in new product development, process improvement and general working capital purposes, including the exporting of products with longer shelf lives, increased automation to improve overall efficiency, increased distribution, new product development, and pursuing available franchising opportunities.
Honey Bun is also targeting a greater share of the local market — of which it controlled up to 38 per cent at the time of the IPO — for individual packaged baked products.
Firms listed on the Junior Market get a 10-year tax benefit (five years free of corporate income tax followed by five years of half tax).