Losses incurred by its Scope Caribbean subsidiary affected bottom line figures for advertising and production company The Limners and Bards Limited (The LAB), which reported a marginal contraction in its net profit for the three-month period ended January.

“Net profit decreased by $0.8 million or 1.2 per cent to $66.2 million for the three months compared to $67.0 million in the corresponding period in the prior year, mainly due to an increase in staff cost, reduction in finance income and a $1.3-million loss reported by our subsidiary, Scope Caribbean Limited,” the company’s directors noted in its latest financials.

“The net profit includes finance income of $0.9 million (three per cent of net profit) compared to $7.0 million (11 per cent of the net profit) recorded in the corresponding period of the previous year. However, if adjustments are made for the losses from Scope and finance income, the net profit would have been $66.6 million versus $60.0 million—an 11 per cent increase over the prior year,” the quarterly report also said.

Scope Caribbean, an influencer and marketing agency, is a wholly owned subsidiary of The LAB launched last year to leverage creative talent and the influencer market across the Caribbean through a data-driven platform.

Commenting on the performance CEO Kimala Bennett said the loss by Scope was expected as the company navigates its early phase of start-up.

“Based on our projections, Scope is not expected to become profitable until the third quarter of this year,” she said in response to queries from the Business Observer.

“We continue to execute our strategy for Scope to become the leading influencer marketing and go to talent agency in the region,” she stated.

The company, which has already invested some $15 million in the subsidiary, said that it was anticipating stronger results and improved contributions to the group this year.

“We have a very positive outlook for the rest of the year and anticipate Scope turning positive results by the end of the year. Going forward the group is also expected to exceed last year’s performance,” Bennett said.

During the reporting period revenues for The Lab climbed to $443 million, expanding by $87 million or 24.5 per cent more than it did for the same quarter last year. At the end of its financial year last October, total sales skyrocketed to $1.2 billion despite the lingering effects of the novel coronavirus pandemic on the entertainment and creative sectors.

Total assets during the period moved from $680.7 million to reach $934 million — 37 per cent above the previous year’s quarter. Shareholder’s equity was $533 million or an almost 16 per cent increase when compared year on year.

“Revenue growth is attributable to increases in the company’s core business, media placement (up $93.2 million or 62.2 per cent) and advertising agency (up $3.6 million or 6.4 per cent. Production was down $9.6 million or 6.4 per cent,” the report also said.