A Honey Bun merchandiser shares freshly packaged baked items on grocery store cabinets. With its latest enlargement into St.Catherine, the corporate is ramping up manufacturing to fulfill rising client demand throughout Jamaica.
Honey Bun is betting massive on development, however the price ticket is displaying up in its backside line.
The bakery firm’s aggressive enlargement drive has pushed income to $1.04 billion for the primary quarter of its 2025 monetary yr, but web revenue slid 11 per cent to $76.9 million as rising prices and capital investments strained money reserves.
With the near-completion of its new manufacturing and distribution facility in Angels, St Catherine, Honey Bun has opted to self-finance the mission, resulting in a 44 per cent drop in money holdings to $284.7 million, down from $508 million a yr in the past.
“This lower is straight attributable to our enlargement mission, the place thus far now we have financed the event from cashflow,” CEO Michelle Chong mentioned within the assertion accompanying the monetary outcomes.
Honey Bun’s enlargement into Angels, St Catherine, is designed to handle escalating product demand and operational constraints at its present Retirement Crescent facility. The corporate has dedicated J$1 billion to ascertain a 160,000-square-foot manufacturing plant inside the MJS Industrial Park, a mission poised to greater than double its manufacturing capability.
Up to now, the St Catherine mission has considerably impacted the corporate’s steadiness sheet, with whole belongings surging 46 per cent to $2.72 billion. A lot of this enhance is tied to prepayments on tools and providers for the brand new plant, in addition to a pointy rise in lease liabilities underneath IFRS accounting guidelines.
“Because of the corporate’s capital funding within the new manufacturing and distribution facility in Angels, St Catherine, Rights-of-Use belongings and the corresponding lease legal responsibility have elevated considerably in accordance with IFRS Accounting Requirements,” she mentioned.
On the similar time, working bills jumped 23 per cent to $391.9 million, reflecting elevated administrative and distribution prices. Regardless of these pressures, Honey Bun improved its gross revenue margin to 48 per cent, up from 46.2 per cent a yr in the past, displaying some operational efficiencies.
Alongside its infrastructure funding, Honey Bun can also be increasing its model portfolio. The corporate’s acquisition of the Swirls model in mid-2024 is a part of its technique to diversify income streams and strengthen its place within the fast-food pastry market.
“The rise in intangible belongings pertains to the goodwill recognised on the acquisition of the Swirls model in June of 2024,” the corporate disclosed, confirming that the acquisition has added to its steadiness sheet.
Honey Bun is prioritising long-term development over short-term profitability, a transfer that has quickly impacted its money movement and web revenue. Nevertheless, administration stays assured within the technique.
“We take this chance to thank our loyal prospects, administrators, staff, and different stakeholders for his or her continued help,” she mentioned.
— Karena Bennett
