LasFin optimistic despite challenged environment
In navigating what it describes as a “challenging business environment” and after delivering a less than favourable half-year performance, Lasco Financial Services Ltd (LasFin) is looking to beef up earnings from its money services/remittance business with the roll-out of new services.
“In the upcoming third quarter, we will be launching LASCO MoneyGram Direct services to expand our market share. This new MoneyGram service will allow the sender to opt for cash pickup at a LASCO agent. LFSL is the first MoneyGram partner in the region to collaborate on such an initiative. We are excited about the prospects and look forward to welcoming new customers to MoneyGram service and of course to LASCO,” Managing Director Jacinth Hall-Tracey said in the company’s recent second quarter filings with the Jamaica Stock Exchange.
On the heels of its recent approval by the Bank of Jamaica as a licensed microfinance institution, the entity, through its growing network of agents, is also hoping to add more meaningful contributions to group bottom line. How it plans to do so is not at the moment immediately clear as responses from the company’s management to questions sent by the Business Observer, up to press time, were not forthcoming.
At the end of the six-month period ended September, revenues for the company dipped to $1.15 billion while its profit plunged to $56 million, three times below the $156.7 million earned in the corresponding period of 2022.
Similarly, its second quarter out-turns also fell below that of the prior year, amounting to $575.9 million in revenues â€” a $47.4-million reduction. Quarterly profit, which also fell significantly below the $73.9 million in 2022, came in at $37.2 million.
The company, in attributing the lacklustre performance to reduced transactions over the period as well as lower than expected cambio gains and increased costs, some of which were associated to debt repayments, said that steps are now being taken to remedy the challenges.
“Some activities were implemented in the first quarter to control administrative costs for the upcoming period and there has been an increase in marketing activity to promote all our services to improve our pace of growth,” the directors said in the report to shareholders, further noting that in view of the outcome, the company has also began to take certain steps to correct the slide in transactions.
Remittances, which globally have been negatively impacted by aspects of higher inflation and rising interest rates, have stemmed the flow of funds, as tightened economic conditions in key source markets soften, consequently limiting employment and wage gains and curtailing migrants’ ability to send funds to loved ones back home.
“LFSL is navigating a challenging business environment while it invests to transition its business and customers to digital services. Our key to success is, [however], ensuring that the legacy business (remittance, cambio and microfinance) continues to grow at a sufficient pace to support the time and income required for customer adoption of the new services,” Hall-Tracey further said in an outlook.