Honey Bun reviews strategy amid expansion
Bakery company Honey Bun has indicated that it is assessing the company's strategic direction using consultants, which was cited by CEO Michelle Chong as one of the factors biting into June quarter profits.
Honey Bun's bottom line shrank by four-fifths to $7.5 million from $37 million in the prior year period.
The company hired new staff and is building out a new warehouse, but was also hit with higher cost of utilities.
"The main areas of increase came from significant increases in the cost of sanitation, electricity and water," said Chong in a statement appended to the June earnings report. "For the period, the company also invested heavily in building human capacity by way of contracts for consultation on key strategic areas of the business," she said.
Honey Bun expects that these investments will have significant long-term value. Compared with the corresponding period last year, the balance sheet shows $35 million increase in cash and $47 million growth in investments.
Over nine months, Honey Bun reported sales of $969 million and profit of nearly $85 million on revenues. Profit dipped 36 per cent.
During the period, the company's borrowing also climbed from $8 million to more than $30 million amid expansion, while its cash holdings spiked to $108 million, due to inflows from the new loan. Construction of the warehouse is expected to wrap up by November, said Chong.
Honey Bun Limited makes and distributes baked products to the local and export markets. The company operates from its bakery and head office on Retirement Crescent in Kingston.