Watch Lasco Financial

Lasco Financial connected parties recently purchased 15 million shares.

When persons connected with the management of a listed company trade shares in the company other investors are well advised to take note.
In some cases it means nothing, but in others it can be a telltale sign of things to come. One such trade that could be telling is embodied in a release to the Jamaica Stock Exchange by Lasco Financial Services that advised that eight connected parties purchased a total of 15.05 million shares in the company on August 9. The average price of the stock on the day the block traded, was $5.29, placing a value on the block of more than $75 million, that is no small change and is more likely than not to be a vote of confidence in the future fortunes of the company.
The purchase takes place after generating revenues of $555 million, $235 million or 74 percent more than the corresponding period in 2017 and importantly, grew $55 million over the $500 million generated in March quarter and may be suggesting the possibility of quarterly growth going forward for a while. Profit before taxation, jumped 62 percent to $132 million from $81 million in 2017. Profit after tax ended the quarter 50 percent higher than the year before at $101 million and could end up around $500 million for the full year for earnings per share around 40 cents.
The strong increase in revenues and profit comes from continued growth from the original business lines and was boosted by the acquisition of CrediScotia business in late 2017.
Profit before loan Interest more than doubled from $83 million to $172 million but funds borrowed to purchase the CrediScotia portfolio pushed interest cost to $41 million up from just $2 million in 2017.
At the end of the quarter, loans and receivables was at $1.8 billion with the majority being loans and the company borrowed $1.5 billion to help fund the acquisition and provide working capital. Shareholders’ equity was $1.47 billion.
This one is worth watching keenly as a long term buy with the large profit margin in lending.

CrediScotia buyout to boost LasFin’s profit

Lasco Financial

Lasco Financial Services doubles its $500 million loan portfolio with the acquisition Scotia Jamaica’s Micro Finance Company Limited which trades as CrediScotia. According to a release from Lasco “the deal was executed on Monday November 13 upon the signing of the share purchase agreement.” 
CrediScotia is a wholly owned subsidiary of Scotia Group Jamaica which entered the Microfinance sector in November 2011 and currently serves its customers from its seven branches islandwide.
Jacinth Hall Tracey, Managing Director of LFSL explains that the move is part of a larger strategic plan for Lasco Financial to continue its focus on expanding its loan portfolio.
“It is a great opportunity for Lasco Financial Services. We have been developing opportunities incrementally to serve our customers who are in need of micro financing, this move immediately gives us the reach and scale as we will immediately double our loan portfolio and number of clients as well as branches across the island. This merger allows us to maximize on the synergies of both companies and will create one formidable company.
CreditScotia will become a wholly owned subsidiary of LASCO Financial Services and will continue to operate independently of the LFSL Group.

Lasco Financial profit jumped sharply for 2017 Q2.

As such, the acquisition will not see any disruption to the business, employees or clients, the release from Lasco stated. That will only be for a while to allow things to settle, eventually, the attractiveness of economies of scale and the savings to be reaped will be too enticing to be ignored.
The consideration was not announced but could be in the region of $500 to $1 billion.
Lasco Financial recently reported profit of that more than doubled in the September quarter, from $44 million to $100 million with the six months results showing profit of $167 million versus $102 million in 2016. The company saw revenues rising to $396 million form $272 million in the second quarter and $715 million for the half year, from $533 million in 2016. While revenues grew rapidly in the period cost were contained well below increases in revenues. For the full year to March 2017, Lasco made net profits of $192 million.
IC forecast was for earnings of 30 cents for this year and 60 cents for the next fiscal year, but this latest move would push earnings higher with 2018/19 enjoying a full year of benefits. At the end of September Lasco had loans and receivables of $1 billion on its books and cash funds amounting to $480 million.
Lasco’s stock closed trading at $4.90 on the Junior Market of the Jamaica Stock Exchange on Tuesday.