HONEY IN HONEYWELL FLOUR MILLS

The chances are that Honeywell Flour Mills PLc will end the current year to March 2016 with some honey in the pot in spite of the times. So nine months figures to December 2015 point out clearly.
According to the figures released this week, this is in spite of the very tight liquidity position of the company and decrease in income from other sources and from finance.
This was because of fair growth in turnover helped greatly by  third quarter yuletide plus sales and in spite of direct cost leap in the same third quarter.
Within the nine months, Honeywell's core revenue rose by 5.68% to N39775m from N37636m principally as third quarter chipped in 26.2% growth.
Thank goodness third quarter contribution to direct cost growth was not as effective because in spite of 25.3% increase recorded within those three months, the nine months rise here came to only 3.23%to N31675m from N30685m.
That heralded honey now in Honey well's pot. This was boosted some more when loss from currency devaluation dropped by 51.8% to N438m from N903m and as finance cost decreased by 20.4% to N939m from N1179m.
Indeed, these helped to absorb pressure from 9.14% increase in selling and administration costs to N5242m from N4803m and fill vacuum created by drop in other income from N345m to N109m and from decrease in finance income from N815m to N337m.
Hence Honeywell profit before tax closed the period at N1927m compared to N1226m previously.
In other words, Honeywell's gain on each N100 income rose to N4.79 compared to N3.16 at the same time in 2014.
Principally this was after reaping N5.78 gain on N100 income in the third quarter as against loss of N1.31 for the third quarter in previous financial year.
SO:
* The way Honeywell Flour Mills manages its huge working capital deficit will continue to count for a long while yet.
* Given the nine months figures, it is likely to end the year with enough honey in the pot

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