Lasco 3 posts slightly higher combined profit
Increased distribution of coffee and ginger tea enabled the three listed Lasco companies to earn $1.3 billion in combined annual net profit last year.
The bottom line for the year to March 31, 2014, reflected a or 2.8 per cent higher increase over year-earlier levels.
Lasco Distributors (LASD) made $587.4 million profit compared with $506.8 million a year earlier; Lasco Manufacturing (LASM) made $584 million compared with $640 million a year earlier; and Lasco Financial (LASF) made $176.6 million compared with $163.8 million a year earlier, financials indicated.
"The consumer division experienced strong growth in key categories and gained additional revenues from the new distribution agreement with Salada Foods Jamaica Limited," said Peter Chin managing director at LASD in his statement of annual highlights. "The agreement with Salada was finalised in the last quarter of the financial year."
During the year, LASD secured the exclusive contract to distribute Salada Foods Jamaica Limited products which include coffee and ginger teas. The distribution of pharmaceuticals however suffered from temporary disruptions based on structural changes with key brands.
"In the Pharmaceutical division, changes were made in business structure with some of our principals," said Chin. "The transition process resulted in operational adjustments and temporary disruption in the supply chain for some key products. These impacted the revenue and profit performance of the division negatively."
LASM benefited from greater exports but suffered a reduction in its bottom line. It was due in part to an 11 per cent jump in administrative, selling and promotional costs to $458 million compared with $413 million a year earlier.
"Our export markets continue to be of greater focus," said Dr Eileen Chin managing director at LASM in a statement of annual highlights. "We anticipate a significant increase in our export sales as we have been experiencing higher demand for our products.
"This coupled with increased product portfolio, market share and new markets will add more value to our shareholders' equity through increased profitability in the years to come."
The company indicated that the "recession" along with the depreciation of the Jamaican dollar affected LASM's bottom line. As such, the company placed a greater focus on exports.
"The company's performance in the year under review was in line with expectations," said Dr Chin. "The performance reflects strong operational management and improved efficiency.
"In line with our anticipation, there was a temporary increase in manufacturing cost during the transition period from the old plant to the new facility."
The Lasco companies are led under the chairmanship of founder Lascelles Chin. Last year, at the annual general meeting he revealed plans to double profits in three years. The completion and integration of the $2.1 billion factory, which will facilitate new lower-priced products, forms the other part of the strategy.
"The production facilities for the liquid plant have been completed and the company has been working diligently to complete the dry blend plant," said Dr Chin. "We are mindful of the fact that the expansion involves substantial business costs.
However, we are committed to excellence in the delivery of superior value. We have established a strong level of trust with our stakeholders and the communities we serve, as we seek to build our competitive advantage through the development of strong 'people' capabilities."