Profit at Lasco Financial climbed faster in the September quarter than in the June quarter reaching $50 million, well ahead of the $31 million earned in 2012 by 64 percent and the $39 million earned in the first quarter of this fiscal year. For the year to date, profit is up to $90 million from $57 million in 2012 by 57 percent. The strong improvement in the bottom line flows from revenues that increased by 46 percent to $303 million for the six months to September over 2012, and 43 percent in the September quarter to $159 million.
The company keeps on totting up the quarterly profits as volume of business keeps on growing with some help from the slippage in value of the Jamaican dollar. Robust growth in profit was recorded in the last fiscal year to March of $164 million compared to $102 million, a 60 percent increase. The strong gain in profit achieved in 2012, up by 244 percent, was helped partially by a revaluation surplus on investment property that was booked in 2011.
Growth in 2013 is helped by the acquisition of cambio and money transfer business from Supreme Ventures. As the company grows in size, the growth rate has slowed but the results to date indicate are that the level seen last fiscal year should continue for the current fiscal year.
Expenses up | Expenses have grown steeply with selling and marketing ahead of revenues with a 55 percent increase for the quarter and 57 percent for the six months. Administrative costs are up, well below revenue growth with the September quarter up 19 percent and year to date 26 percent.
The company is now in the major period for earnings when remittances rise ahead of the Christmas season, which is expected to push profit well above what has been earned in any of the two quarters so far.
“The increase in income is a result of the growth in the remittance business due to additions of key partners and ongoing promotions,” management stated in their release to shareholders.
IC Insiders forecast is for earnings to be around $250 million or 20 cents per share for the full year.
Marketing | Management indicated when they released the June quarter figures “that Lasco Financial has commenced significant investments in marketing activities, which are expected to capture even more substantial market share for our remittance division; the outcome of which will also yield growth opportunities in the Currency Trading division. This is noticeable in our selling and promotion expenses which saw a 58 percent increase, up from $36.3 Million in the previous period to $57.6M. Administrative and other expenses rose in the quarter to $47.6 million up 33.7 percent over the same period of 2012.”
The company’s subsidiary Lasco Financial Services (Barbados) Limited and its agent Unicomer Barbados Limited (Courts) began trading in May 2013. Lasco indicates that this business is now at a breakeven level.
Growth | Total assets amounted to just $47 million in 2010 but has enjoyed rapid growth and is at $661 million at the end of September this year, still a small financial company in the local market with room to grow. Loans advanced was nil at the end of 2011 and is now close to $100 million at the end of March this year and is expected to grow at about 30 percent for the year. Loans and receivables rose to $335 million at the end of June up from $237 million at the end of June last year, is down to $261 million at September. Cash also increased and is now at $282 million compared to $136 million at the same period in 2012. Equity stood at $564 million and is expected to increase as profits roll in.
Lasco Financial is an IC Insider Buy Rated stock.
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