STATIONERY and Office Supplies Limited (SOS) has seen a recovery in its earnings from a slowdown in 2020, with a 16 per cent jump in revenues to $1.12 billion and a 224 per cent rise in net profit to $107.12 million for its 2021 financial year (FY) ending December 31.

SOS distributes a variety of office furniture supplies to numerous companies and a manufacturer of the Seek brand of books. While furniture sales in 2019 made up 74 per cent of the $1.22 billion earned in revenue, the script completely flipped as the stationery and others segment made up 55 per cent of revenue and 56 per cent of the $551.15 million gross profit. Furniture and books (Seek) contributed $462.18 million and $48.24 million to the company’s revenue. The 2019 FY was SOS’s best year on record, which included a historic $134.56 million in net profit, two years after listing on the Jamaica Stock Exchange’s Junior Market.

“Coming into 2021, SOS, like everyone else, continued to face the uncertainty of the economic rebound in Jamaica due to the COVID-19 virus and its possible future variants. SOS was able to use its experience during 2020 to plan and direct the company through the uncertain future. With a staff comprised of exceptional people and with sound planning, SOS was able to not only rebound but to prosper through the difficult times during 2021,” stated the shareholder report signed by newly appointed managing director Allan McDaniel and company secretary Marjorie McDaniel.

Due to the company’s management of expenses during the period, SOS was able to grow its operating profit by 126 per cent to $123.46 million and improve its operating margin from 6 per cent to 11 per cent. Lower finance costs minus the exclusion of the gain on disposal of property plant and equipment in 2020, SOS’s gross profit before climbed to tax $105.51 million compared to the $34.25 million. Earnings per share totalled $0.43 versus the $0.13 in the 2020 FY.

SOS also highlighted that its fourth quarter produced a profit before tax of $13.3 million relative to the loss of $8.2 million in the comparative period. Even without the inclusion of large school sales, SOS saw a positive recovery in all of its divisions in the 2021 FY while focusing its business on serving corporate clients. SOS expects that the reopening of schools for face-to-face sessions will drive sales for its Seek school books.

SOS’s total assets grew by 5 per cent to $928.02 million as the company took on more inventory to the tune of $296.02 million to combat the increase in shipping costs to bring goods in the country. However, this impacted the operating cashflow of the company which declined from $125.93 million to $25.98 million, with the overall cash position closing the year at $34.46 million. Total liabilities declined by 10 per cent to $251.19 million as the company paid down heavy on its non-current liabilities mainly covering loans. Shareholders’ equity grew by 11 per cent to $678.83 million with shareholders benefiting from a $40.02-million dividend payment in the year. SOS’s stock price remains up by 13 per cent year to date at $7.24.