Lasco Financial Services reported lower profits for the quarter and nine months to December 2015. Net profit fell to $43.88 million in the quarter from $69 million in 2014, for the nine months profit fell to $158 million versus $181 million in 2014.
The company profit is now to taxes at 50 percent of the normal company’s tax rate.
Notwithstanding the fall in profits, third quarter revenues increased by $39 million or 19 percent over the corresponding 2014 period to $239 million and for the nine months, to $649 million, up 9.3 percent from $566 million in 2014.
Income from the company’s original source of business, increased by $31 million in the quarter. “All business lines grew the contribution to revenues; Remittance transactions and revenues continue to grow ahead of the industry and the Cambio and Loans divisions increased its transactions and revenues, following the expansion of the branch network. The increase in revenues from our new business lines and value added services resulted in Other Operating Income for the period growing by 100 percent to close the quarter at $14.4M” Managing Director Jacinth Hall-Tracey told shareholders in a report accompanying the results. For the nine months, the income was up by $79 million to $626 million, while other operating income grew to $33 million for the nine months, from $18.5 million and in the quarter, it rose from $7 million in 2014 to $14.4 million.
Nine months’ expenses increased 28 percent or $110M million resulting in a year to date operational profit of $164 million, 9 percent below the previous year’s $181 million. “We launched in September our first business loans branch and closed the quarter with three locations, two in Kingston and one in St. Catherine; two more will be opened in the first week of February. We also launched our Telecoms Division with the distribution deal for Huawei Smart Phones and wearable devices, rolling out eleven locations islandwide through our agent network. This investment impacted our expenses mainly due to a more than 50 percent increase in staff complement and the aggressive marketing support to launch the telecoms business launch the telecoms business,” Hall-Tracey advised shareholders.
Expenses for the quarter grew by 44 percent over the corresponding quarter to $189 million and from $385 million in the 2014 nine months period, to $495 million for an increase of 29 percent, much greater than the increase in revenues. Earnings per share is 13 cents for the nine months and should end around 18 cents for the year, but 2017 fiscal year should see a jump, as the expansion now underway starts to flow into profits.
The company’s stock closed trading on Friday at $4.25 at a PE of 23 times estimated March 2016 earnings.
Expansion weights down Lasco Financial
February 5, 2016 by
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