Investors can expect a positive outlook going forward but with a less aggressive profit growth, according to Michelle Chong, the bakery’s chief executive officer, in her statement prefacing the financials.
“While we expect performance to continue to show improvements over prior year, it should be noted that due to seasonal variations the first and second quarters are normally more profitable than the third and fourth quarters,” said Chong.
Revenue in the quarter hit $292.6 million, up from $206.4 million a year earlier. Part of that growth came from exports which increased 75 per cent year on year.
“The significant increase in profit is a result of increased revenue and control on cost-to-revenue ratios and fixed expenses. While revenue increased by 42 per cent, administrative expenses and selling and distribution costs increased only by 22 per cent combined,” said Chong.
The growth of the company’s earnings led it to record $80.4 million in cash holdings compared with a deficit of $5.7 million a year earlier. The company’s equity stands at $413 million with relatively low levels of debt at $37 million.
Honey Bun listed on the junior stock market in June 2011, which gave the bakery 10 years of tax breaks – the first five being a full waiver of corporate income tax. On June 2016, its 100 per cent waiver will reduce to 50 per cent.