LASCELLES deMercado would have seen its pretax profit grow by 20 per cent if it were not for a $1.4 billion deduction associated with the discontinuation of its pension fund. 

As a result the company posted $2.6-billion in net profit for the year ended September 30, 2009 — an 18 per cent reduction on last year’s net profit of $3 billion. 

In January Lascelles, Henriques et al Superannuation Fund (LHSF), a defined benefit pension scheme, was closed to the admission of new members, which meant that without additional contributions to the fund it would have a “finite life”. 

“Consequently, the present value of the economic benefits available to the employers in the form of reductions in future contributions has been reduced by an aggregate amount of $1,385.8 million,” said the company’s financial statements. 

Lascelles’ operating profit of $3.03 billion was marginally lower than the $3.08 billion it posted the year before, but other income, or $229 million more than doubled that earned last year while net finance income grew 177 per cent to $986 million. 

That wasn’t enough, however, to offset the one-off expense called “pension assets derecognised”, totalling $1.4 billion. 

Another $115 billion made in the year ended September 30, 2008, from its Lascelles Telecom — now sold — also contributed to the reduction to the bottom line. 

On July 31, 2008, the business including the related assets and liabilities of the Lascelles Telecoms division of Lascelles Limited was sold to a third party for $93.6 million, resulting in the gain. 

Lascelles’ business segments performed better overall, with the exception of Investments, which recorded a $1.4-billion fall-off in pre-tax profits. 

Lascelles’ liquor, rums, wines and sugar division saw its pretax profit climb from $1.06 billion to $1.56 billion; its general merchandise segment increased profit before tax from $345 million to $458 million; general insurance pretax profit climbed from $586 million to $704 million; and its transportation division recorded $7 million more in pre-tax profit, or $56 million. 

The fall-off in Investments profit was due to a charge to employee benefits assets of approximately $1,182 million.