Press Release

JCR-VIS Assigns Entity Ratings to Bunny’s Limited

Karachi, March 21, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A-/A-2’ (Sing A Minus /A-Two) to Bunny’s Limited (BL). Outlook on the assigned ratings is ‘Stable’.
The ratings assigned to BL take into account moderate business risk profile of the institution reflected by an established brand name, sizeable market share in Punjab in the bread segment, largely stable product demand and pricing leading to sustained margins. BL is a family owned business and operates in two main segments including bread and snack segments.
Over the last five years, net sales of the company have grown by a Cumulative Annual Growth Rate (CAGR) of around 8% with revenues from bread segment, including cake, rusks, buns etc., representing more than 90% of net sales. Majority of the sales (~89%) comprises non-institutional sales while among institutional sales the company sells its products to renowned brands. Going forward, management expects the positive momentum in earnings to continue as a result of production facilities expansion planned to meet increasing demand.
Liquidity profile draws support from adequate cash flows in relation to outstanding obligations. Cash flow coverages are expected to remain adequate on account of extended repayment profile of long term debt. Long term facilities comprise privately placed term finance certificates which were restructured in the past are now regular. With additional borrowings planned for expansion project, gearing indicators are expected to increase however overall capital structure is expected to remain commensurate with the outstanding ratings.
Top management team of the company comprises experienced resources and includes representatives of the sponsoring family. Overall corporate governance framework including internal control infrastructure has room for improvement. Some initiatives have been taken in this direction; however a rotation of external auditors would further strengthen these.
For further information on this rating announcement, please contact the undersigned at 021-35311861-70 (Ext: 234) or Mr. Waqas Munir, FRM at 042-35723411-13 (Ext: 8010).

Javed Callea

Applicable Rating Criteria: Industrial Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited