Stationery and Office Supplies Limited (SOS) has spent $100 million to acquire a new warehousing property in a bid to meet its growing product range for the local and export market.

The 5 West Arcadia Avenue-located property, which was acquired in November, will see SOS developing one-quarter acre into further warehousing space for its growing inventory base which topped $349.23 million as of September 30. This is in addition to SOS recently completing a $66-million expansion at its 23 Beechwood Avenue head office where it constructed a new warehouse in Q3 that gave it an additional 5,000 square feet of storage space for the company.

The added space will allow for the company to add an additional 200 pallets of inventory and hold another 40-foot container at its combined 41,000 sq ft of space between Beechwood and Collins Green avenues. SOS’s property, plant and equipment had a net book value of $669.23 million at the end of September with $72.47 million spent in the first nine months as capital expenditure.

“This expansion aligns seamlessly with our ambitious plans for growth not only in Jamaica, but also in the wider Caribbean. More companies are investing in hard infrastructure, and the work we are undertaking shows us there is also greater foreign direct investment into Jamaica, which is very encouraging,” said SOS Managing Director Allan McDaniel in a press release.

The 58-year-old company which is in the stationery supplies, office furniture and book manufacturing space with its Seek brand has been having an explosive year having achieved its highest level of profitability to the tune of $294.34 million for the first nine months of 2023. This is not only 17 per cent above the comparative 2022 period, but also exceeds the $256.51 million earning in all of 2022 which was already a record year.

This growth in profitability has been a result of sales moving up 16 per cent to $1.53 billion from a combination of three additional delivery vehicles in Montego Bay, a 40 per cent jump in warehouse equipment, record sales for Seek and steady sales growth averaging $10 million for its Evolve furniture line.

These initiatives have put the company on track to the $2 billion revenue mark to be achieved by year end which will be facilitated by greater exports, new brands and servicing a wider cross section of Jamaica. The addition of the 3,000 sq. ft. off-site warehouse for its Montego Bay office will result in doubling its warehouse capacity for the segment which had $193 million in sales.

The company also courted the Cayman Islands through a partnership with the Apex Group which was set to bring in US$750,000 in sales along with a partnership with the Office Authority in Trinidad & Tobago which opened it to that market. SOS is exploring other Caribbean markets for its expansion prospects.

SOS’s total assets were up 25 per cent over the nine months to $1.73 billion with non-current assets at $692.86 million and cash and bank balances at $320.84 million. Total liabilities and shareholders equity were $380.47 million and $1.35 billion, respectively. SOS’s strong performance was also reflected in its operational cashflow which nearly tripled from $133.09 million to $343.61 million during the nine months period.

SOS’s stock price closed Friday at $1.65, which leaves it down 12 per cent from the $16.92 ($1.88 nine-to-one split adjusted price) it started 2023. This left it with a market capitalisation of $3.71 billion. SOS’s only listed senior manager with shares in the company sold 500,000 shares on November 30 at an average price of $1.60. SOS’s top 10 shareholder list has seen further concentration with Barita Investments Limited appearing in the list for the first time and JNBS Pension Trustees Nominee Ltd exiting the list. QWI Investments Limited, Nigel Coke and Bridgetown Management Services Limited have bought more shares in 2023.

“These expansions are pivotal to our long-term success. Soon, we will further optimise our logistical efficiency and strengthen our market presence. The expanded storage spaces, including the recent acquisition and ongoing warehouse project, will empower us to enhance inventory management, reduce lead times, and seamlessly scale our operations,” McDaniel closed.