Honeywell Flour Mills Plc has resisted the rampaging bears at stock market as its share price remained stable. The company got listed on the Nigerian Stock Exchange (NSE) last October after a successful Initial Public Offering (IPO) at N8.50 per share.
While other stocks that were listed recently have suffered losses in their value due to the weak demand for their shares, Honeywell Flour Mill, has stabilised at N8.50 per share.
Market operators attributed the stability in the share price to investors’ confidence in the future prospects of the company.
According to market operators, the half year financial results of the company ended September 30, 2009 and expansion plans showed a prosperous future that investors would want to buy into.
“Succeeding with an IPO at the heat of the stock meltdown alone is enough evidence that investors have confidence in the company. The prospects in the company have further been boosted by the half year impressive results of the company,” Mr. Ayo Oguntayo of Mission Securities Limited said.
Honeywell Flour Mills posted a turnover of N17.8 billion for the half year to September 30, 2009, showing an increase of 21 per cent above the N14.5 per cent recorded in the corresponding year of 2008.
Profit before tax soar by 228 per cent from N493 million to N1.62 billion, while profit after tax rose from N258 million to N828 million.
The Managing Director of the company, Mr. Babatunde Odunayo, attributed the impressive performance to the reduction in energy costs, occasioned by the inauguration and deployment of the Gas Plant in the production facility of the Flour Mills business as well as increase in margins from additional volumes in Semolina and the new wheat meal businesses. Other factors included increase in overall volume and turnover, and efficient cost saving mechanisms the company deployed.
He said that the performance would be sustained through the last quarter of the 2009 and the years ahead, adding that strategies have been put in place to further expand products line and deepen its market share.
“As part of the plans to improve our market share and boost profitability, we have released Honeywell whole wheat meal, which is a highly nutritious and healthier alternative to the local ball foods, into the market. We inaugurated the Pasta Plant project in July 2009 while the Honeywell Spaghetti and Honeywell Macaroni Pasta were introduced into the market in August 2009, “he said.
Odunayo said that the company will remain focused on its strategy of providing range of quality products in the food sector for the complete satisfaction of its valued customers and other stakeholders.
Speaking on the growth strategies of the company, the CEO said that besides introducing new products, the company will increase its focus on cost reduction through continuous integration of the Honeywell Superfine Foods business, which will continue to provide revenue and costs synergies.
He said: “Another growth mechanism is improving product quality through qualitative research and development to produce more attractive and better quality wheat and grain based products. Expansion of the Semolina business production capacity is the third pillar of the expected growth,” he said.
Honeywell Flour Mills Plc started in the year 1985 as Gateway Honeywell Floor Mills Limited but changed its name to Honeywell Flour Mills Limited. In 2004, the company received Nigeria Industrial Standards (NIS) Award from Standard Organisation of Nigeria (SON) for quality of flour. In 2006 it received Nigeria Industrial Standards (NIS) ISO 9001:2000 QMS Certification.