Honey Bun’s Year-End Net Profit Grows YoY Due to Higher Revenue

• Owing to an increase in revenue, Honey Bun Ltd. reported a 31.2% increase in net profit to $218.69Mn (EPS: $0.46) for the year ended September 31, 2021. 
• The company was able to grow revenues by 28.1% for the full year which was partly attributable to a very strong fourth quarter. Also supporting the net profit performance was a 43.5% increase in finance income and a 17.1% reduction in finance cost. The lower finance costs were due to lower loan and lease interests and other finance costs. 
• The performance was, however, tempered by an increase in admin and other expenses (20.5%), selling & distribution (19.0%), and tax expenses (194.4%). The increase in admin expenses was in part due to higher spending on staff costs, repairs and maintenance, and rates and taxes. Spending on advertising and promotion and property rental also grew, influencing the rise in selling & distribution costs. The company’s 50% remission in taxes expired May 2021, as such all earnings from June 2021 will be expensed at the full income tax rate. This would have influenced the YoY increase in taxes. 
• Honey Bun’s stock price has appreciated by 85.7% since the start of the year and closed Tuesday’s trading session at $9.86 per share. At this price the stock currently trades at a P/E of 20.5x which is above the junior market manufacturing sector average of 18.9x.

(Sources: Honey Bun Financials & NCBCM Research)