Already navigating a challenging business environment, the first quarter period for Lumber Depot was further worsened by disruption to construction activities as a result of Hurricane Beryl which saw the company realising reduced net profits at the end of the period ended July 30, 2024.

At the end of the three-month period, profit for the company fell to $45.2 million — 13.9 per below the $52.6 million earned for the similar period in 2023. Revenues, which also decreased to $386.5 million, was 7 per cent less than that of the prior year’s period.

“During the period, our customer base faced uncertain economic conditions, including elevated interest rates, increased operating costs and the disruption to construction activity arising from Hurricane Beryl. Despite the challenging environment, our business remained solidly profitable and highly competitive,” Chairman Jeffrey Hall said in an interim report to shareholders posted with Jamaica Stock Exchange (JSE) filings recently.

The once booming local construction industry, which continues to suffer from reduce building activities, at the end of the April-June quarter, according to Planning Institute of Jamaica (PIOJ), estimates saw further declines of 2.4 per cent following downturns of 3.7 per cent seen in the previous Jan-Mar quarter.

Factoring other challenges which stemmed from heightened insurance, security and some staff retention costs, the company’s directors said its management remains pleased with the operations of the over two decade old company which operates in the highly trafficked and growing university community of Papine.

Over the reporting period, administrative and other expenses for the company climbed to $48.7 million, up from $37 million last year.

“We are satisfied that these increases, though significant, support our development of a secure platform for long-term growth,” the report noted.

Lumber Depot fresh on the heels of securing a 35 per cent interest in Atlantic Hardware & Plumbing Limited (Atlantic) which it purchased for $210 million back in May, the chairman said continues to ramp up its strategy for further expansion and acquisition.

Atlantic, a 30-year-old company based at Ashenheim Road in Kingston, is a local distributor of building materials, plumbing and electrical, tools and other supplies to hardware stores, contractors and developers across Jamaica.

“We expect this enterprise to contribute to our overall profitability in the years ahead,” Hall said.

Managing director of Lumber Depot Major Noel Dawes, in commenting on the first acquisition for the company, said the business will continue to be strategic in how it grows both operations going forward.

“As a board we will also continue to meet to discuss and examine our strategic outlook to see how best we can move in further developing both companies and we continue to assess them one at a time and in a very strategic way to ensure that we get maximum value for all our investors,” he told the Jamaica Observer at the time of the acquisition.