Despite the novel coronavirus pandemic, Lasco Manufacturing Limited (LASM) increased its revenues by four per cent to $8.22 billion with profit before taxation up by 46 per cent to $1.76 billion for its 2021 financial year (FY) ending March 31.

The company, which produces several well known local products, saw gross profit growing by seven per cent to $3.11 billion and the overall gross margin improving by 100 basis points (one per cent) to 38 per cent. Total income was up by six per cent to $3.14 billion compared to the $2.95 billion achieved in the 2020 (FY).

“It was a great year because we laid the foundation and had a price strategy to give good value for money. We lowered prices for the Jamaican consumer and the competition had to follow.

“James Rawle [managing director at LASM] has been creating efficiencies and containing cost in this pandemic which has seen sharp price increases from shipping, delays and raw material spikes. We have been able to minimise our price increases especially with the efficiency that has been created.

“There are many team members who contributed tremendously to our performance. The team did a great job as Rawle was able to provide a lot of training which they were able to absorb and display with the results,” stated Executive Chairman Lascelles Chin.

Total expenses for LASM declined by 20 per cent to $1.32 billion as selling and promotional expenses were cut by 53 per cent to $136.85 million while administrative expenses closed 13 per cent lower at $1.19 billion. The reduction in selling expenditure was largely attributed to the drop in promotional activities, which had to do with COVID-19 restrictions. Staff costs dropped by 23 per cent to $550.49 million as no directors exercised their share options in the year while salaries for staff increased by 12 per cent to $385.30 million. These cost cuts resulted in operating profit spiking by 40 per cent to $1.81 billion.

Although LASM had a 37 per cent cut in financing costs to $59.19 million, income tax rose by 73 per cent to $376.18 million as the company’s tax remission expired on October 11. This resulted in the company’s net profit finishing 41 per cent higher above the $981.68 million to a superb $1.38 billion. Earnings per share for the FY was $0.33 compared to $0.24.

Total assets for LASM are up by 11 per cent to $10.85 billion with current assets increasing by 22 per cent to $5.63 billion. Non-current assets closed the period at $5.22 billion with capital expenditure for the year totalling $250.61 million. Cash and cash equivalents at the end of the year was $1.86 billion on relatively strong operating cashflow of $1.43 billion.

Total liabilities declined by 2 per cent to $2.94 billion with the non-current portion of long-term loans down from $548.70 million to $364.57 million. Shareholders’ equity increased by 17 per cent to $7.91 billion as strong earnings and unrealised gains pushed the line item higher.

Rawle noted that price increases will occur in the near term as the magnitude of price increases begins to weigh on the company.

“LASM did not lay off staff and chose not to increase prices during the pandemic due to the sluggish economy and need for people to have more affordable options.

“New product launches were delayed due to the pandemic and the important containment measures and protocols that have been implemented within the country and which we have insisted on observing. Hence, the environment was not right for the launches. We expect to have launches during the new this new fiscal year and feel encouraged with the roll-out of vaccination and other measures to contain the pandemic.

“At LASM, profitable growth is the fundamental objective. Investments in new technology and manufacturing processes is one avenue that we are exploiting to deliver organic growth while we continue explore opportunities for partnerships and possible acquisitions which fit our business model.

“Diversification and investment in new products is an important pillar in our growth strategy. We will continue to invest in new plant, equipment and technology to diversify and achieve growth. As in the past year, special attention will be given to ensure strict cost and cash management while continuing to protect the supply chain and adherence to protocols to ensure the health, safety and well-being of its employees,” Rawle said.