Lasco Financial’s marketing investment

The latest quarterly report to December 2013, shows that Lasco Finance Services pumped in funds to nearly double its promotional cost to push for a greater share of the remittance business, resulting in heightened marketing and selling cost from $111 in 2012 million to $204 million in 2013.

In the December quarter the cost was pushed to $87 million compared to just $36 million in 2012. The increase spend in this area kept profits down to $46 million versus $55 million in the December 2012 quarter and for the nine months period $136 million or 20.6 percent above the 2012 results for the similar period. Administrative cost rose by a strong 26 percent for the year to September but by the end of 2013, the rate of increase fell to 22 percent as the December quarter increased by only 15 percent to reach $47.5 million and for the nine months $144 million versus $118 million.

With the reduced spend on promotion that should flow with the completion of the World Cup promo, profit should end the year around $220 million and that would be up from $164 million in 2013 or earnings of 18 cents per share.

FX_USPound2“In pursuit of our strategic objective to increase our market share in the remittance industry, towards the end of the 2nd Quarter, we launched our Brazil 2014 promotion which lasted until December 31, 2013. This investment contributed to the more than 100% increase in selling and promotional expenses. We anticipate that the resulting rise in transactions from this awareness campaign will continue into the future periods,” management stated in release accompanying the results.

As the promotion ended, the March quarter figures should reflect much lower cost in this area and with that increased profit. Trading income in the quarter rose by a strong 42 percent to reach $176 million and for the nine months period the growth was 42.6 percent taking it to $469 million.

The financials remain strong with equity of $610 million, liabilities of only $95 million and cash of $302 million.

Lasco Financial is an IC Insider Buy Rated Stock. To view the full list, click here.

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  1. […] to a lesser degree remittance services are fairly matured and growth has to be explored elsewhere. Lasco Financial should generate in excess of 40 percent return on equity for the current fiscal year. As of […]

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