A FOCUS on innovation and quality control has led to another sweet interim result for Capilano Honey (ASX:CZZ), with profit up 52 per cent to $7.77 million.
The Brisbane-based company's share price rose 8 per cent today to $20.79 amid the buzz of another record half-year.
Capilano Honey also secured a bigger share of the market, with revenue up 15 per cent to $67.1 million compared to $57.9 million in HY15.
Export sales have driven performance with growth of more than 32 per cent and sales to Asia up 53 per cent.
Capilano managing director Ben McKee says the company has been able to combat the rising price of honey by reviewing its strategy.
"Capilano's business continues to grow as we concentrate on the core strategies of meeting our consumer's expectations, leading innovation and delivering consistent premium quality in both flavour and packaging," McKee says.
"The average cost of supplier honey for the past six months to 31 December has risen to $5.64/kg compared with $4.61/kg for the same period last year, reflecting heightened competition in the market and sustained lower primary production.
"Changes in sales mix and wholesale price increases has largely recovered the rising cost of raw materials."
Capilano has bolstered its honey stock to 4,228 tonnes from a historical low of 2,223 tonnes for the same period last year. The inventory value equates to $32.6 million, securing its ability to meet new sales demand.
The company recommissioned a factory in Victoria to expand its operational capability, as well as deliver a range of premium glass jars and non-honey products.
Retail honey production will be relocated to the Maryborough site, to improve retail packing capacity at its Brisbane headquarters.
"Greater levels of inventory and continued interest in our natural wholesome products, in conjunction with new product ranging, should see Capilano continue to prosper over the remainder of the financial year and into the future," McKee says.
The board has continued its practice of only considering a dividend annually.
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