Cost cuts drive up Lasco Distributors profit

Profit at Lasco Distributors is 26 percent higher for the year to March 2021 at $909 million, but profit before taxation climbed a much stronger 36 percent to $1.1 billion from $818 million in 2020 as cost reduction and moderate revenue growth of four percent helped with the increase in the bottom-line. Pretax profit in the fourth quarter rose 23 percent to $246 million over $201 million in the 2020 period.
The company enjoyed a ten-year tax profit break and is now subject to full taxation as of October 12, last year.
Gross profit margin came in at 18 percent for the year, down from 19.4 percent in the 2020 fiscal year and the prior two years. Revenues climbed for the fiscal year to $20.3 billion from $19.5 billion in 2020 but fell three percent in the final quarter to $5.06 billion, from $5.195 billion in 2020.
Administrative and other costs fell 10 percent for the year to March to $2.13 billion from $2.37 billion in 2020. Staff cost fell from $1.72 billion to $1.56 billion as the number of workers fell from 532 to 509. Selling and promotion expenses fell from $703 million to $549 million.
Finance cost dipped from $15 million to $5 million as the company continues to pay down loans that stood at $1.05 billion at the end of March 2020 to $820 million at March 2021, with $454 million earmarked to be repaid in 2022 fiscal year. Taxation charged for the year amounts to $207 million, up from $93 million in 2020.

The principal activity of the company is the distribution of the manufactured products of Lasco Manufacturing that includes soy-based products, juice drinks, water and packaging of milk-based products and Pharmaceutical and other products manufactured by third parties.
Shareholder’s equity stood at $6.5 billion at the end of March 2021. Cash funds and investments amount to $2.69 billion after the company generated cash funds of $1.27 billion before working capital and capital financing needs and paying a dividend of $179 million.
Lasco generated earnings per share for the year of 26 cents, up from 21.3 cents in 2020. ICInsider.com projects earnings of 40 cents for the fiscal year to March 2022 and 45 cents for 2023.
The stock last traded at $4, with a PE ratio of 10 based on the reported earnings and 9 based on the 2023 projected earnings. The price target to March 2022 for the stock is $6.

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