Lasco Manufacturing profit jumps

Profit at Lacso Manufacturing before tax jumped 79 percent to $764 million for the nine months ended December 2015, this compares with $426.3 million for the same period in 2014, while profit for the quarter increased 69 percent over the same period in 2014 to $267 million before provision of $35 million of corporate taxation.
The strong improvement flowed from 45 percent jump in revenue for the nine months from $4.83 billion, for an increase of $1.5 billion or over prior year’s $3.33 billion. Revenue for the quarter rose by a slightly slower 39 percent from $1.25 billion in 2014 to $1.74 billion in 2015. Gross profit for the nine months rose from $892 million in 2014 to $1.60 billion in 2015, an increase of $703 million or 79 percent in line with the increased profit. For the quarter, gross profit rose by $257 million or 89 percent from $290 million in 2014 to $548 million in 2015 but increased interest and depreciation cost associated with the new factory ate up proportionately more of the revenues than other cost.

Operating expenses for the nine months to December 2015 rose by 82 percent or $313 million over prior year’s $383 million to hit $696 million, due to increases in staff compliment, marketing expenses and new products development costs. For the quarter to date, operating expenses were $220 million compared to $89 million in prior year.
Earnings per share for the nine months ended December 2015 rose from 10 cents for the same period prior year to 18 cents and should hit 29 cents for the full year and close to $1 in 2017. The stock which trades at $5 on the Jamaica Stock Exchange junior market, is selling above the market average, at PE of 17 times current fiscal year’s earnings. With new products now being produced, revenues and profit should continue to increase in the next fiscal year which would ensure that the current PE is not all that high but the stock make bounce around for a while until the next set of results are known.
The company generated gross cash flow from operations of $994 million versus $509 million in 2014 even as receivables rose to $2 billion inclusive of prepayment and deposit on equipment of nearly $600 million, compared with $897 million at the end of 2014 and $1.1 billion at the March year-end. Fixed assets net of depreciation swelled to $3.1 billion from $1.1 billion at March 2014 as capital work in progress fell from $2.26 billion to only $400 million. Cash funds grew to $372 million from just $50 million in 2014 but borrowings jumped to $2.15 billion including overdraft of $641 million from $1.38 billion at March 2014.