DWINDLING remittance revenues compounded by a fall-off in income from its microfinance subsidiary has led to a decline in profitability for Lasco Financial Services for the financial year ended March 2024.

However, Managing Director Jacinth Hall-Tracey says the company is already taking steps to ensure that the dip in earnings does not reoccur for the current financial year, noting that LASF is already in talks to strike up new partnerships and has added new features and new technologies in its business ventures. The initiatives are expected to lead to an overall increase in transactions, and efficiency in operations.

“These will continue to be our focus for 2024 into 2025,” she said in the preamble to the financial statements.

LASF, the smallest of three affiliated companies that include Lasco Manufacturing and Lasco Distributors, posted earnings of $161.9 million for the year – a 32 per cent dip when compared to earnings of $213.9 million the company made a year earlier.

Consolidated income for the year was also down by a 5.78 per cent decrease, or $134.9 million, when compared with the corresponding 2022-2023 financial year.

“Total revenues from core services reflected a downward trend for the year, impacted mostly by the contraction of our agent network which led to a decrease in transactions and reduced income from our subsidiary. There was an increase in contribution from other income of 19.82 per cent or $31.7 million, however this was not sufficient to offset the reductions in revenues from the core services,” Hall-Tracey said in explaining the company’s performance.

Further, LASF racked up more expenses throughout the year from an overall increase in selling costs of $60.6 million as well as the microfinance subsidiary, Lasco Microfinance, which is said to have reported a “small loss”primarily due to a redundancy exercise which forms part of a restructuring of the business.

“Certain changes in accounting standards also contributed to the loss,” Hall-Tracey added.

Last year LASF carried out an organisational restructuring which resulted in 15 posts being made redundant across it and its subsidiary Lasco Microfinance.

Both business divisions have spent the past two years trying to navigate difficult industry developments, some of which stemmed from the outbreak of COVID-19.

Despite the dip in performance, Hall-Tracey isn’t daunted by the results. She reasoned that the group delivered “fairly good financial results” despite industry challenges.

“Going forward, we expect improved performance based on the promotional activities to stimulate growth, as mentioned earlier. There have been ongoing adjustments in the business of the subsidiary, and some key activities were implemented in the year which will strengthen its performance. Great focus is being placed on this business with the expectation that overall shareholder value will be increased.

Hall-Tracey did not delve into the details of the company’s next steps when requested by the Observer.

However, past initiatives rolled out by the company include a campaign launched by MoneyGram which guaranteed customers a higher payout rate when remittances were collected at the Lasco agent network. An education campaign was also launched for Lasco cards involving messages to “Simplify your Life”, and a new sub-agent cambio was added in Linstead.

More media visibility and a major campaign were also launched to boost micro, medium and small enterprises (MSME) business loans for Lasco Microfinance. The initiative was done in partnership with the Ministry of Industry, Investment and Commerce through their MSME roadshow.

During the year, LASF also reduced its cash holdings to pay down its long-term loan with JMMB Bank.

“We reduced the loan by $439 million or 42 per cent. The net effect is a reduction of $287.8 million in our cash holdings at year end. Our balance on long-term debt now stands at $581.7 million to JMMB Bank and $123 million to the Development Bank of Jamaica,” Hall-Tracey said, adding that LASF still maintains a fairly healthy cashflow to fund its daily operations and to fund growth of its loan portfolio.