Net profit declined by 30 percent to $214 million for the fiscal year to March 2023 from $306 million in 2022 for Lasco Financial Services. Still, the earnings per share barely fell, according to the recently released audited report. The earning per share is actually 16.7 cents rather than the 23.94 cents reported in the audited Financial Statement, compared with 24.05 cents in 2022.
The company did not have a good year, with revenues falling from $2.5 billion in 2022 to $2.27 billion even as loan income grew during the latest year. Revenues in the fourth dropped sharply to only $410 million versus $662 million in the 2022 fourth quarter. Fourth quarter profit came in slightly below the December quarter’s $31 million at $27 million on far lower revenues than the $572 million in the December quarter.
Loans payable include two with ten year tenure amounting to $1.095 billion due to JMMB with interest rates at 8.25 and 8.75 percent per annum and 2 percent per annum loans amounting to $143 million from the Development Bank of Jamaica for on lending.
Loans advanced to borrowers ended at $1.039 billion for the fiscal year, up from $1.013 before provisions, and after provisions, loans are up nearly 11 percent to $900 million from $813 million in 2022. Quality improved in 2023, with amounts set aside for impairment dropping to $138 million, or 1.3 percent of the loan portfolio, from $201 million or 2 percent in 2022, as $60 million was recovered from impaired loans during the 2023 fiscal year. Loans that are current have a provision of $24 million compared with $13 million in 2022.
Administrative and other expenses rose 6.8 percent to $1.18 billion from $1,105 billion in 2022, but Selling and promotion expenses fell 13 percent to $647 million from $745 million, partially as Commission and fees fell seven percent from $653 million to $609 million. Overall, non-financial expenses declined from $1.85 billion to $1.83 billion. However, staff cost jumped 18 percent to $654 million, with staffing at the end of the year jumping 23 percent to 201 employees from 164 in 2022. Finance costs fell to $117 million from $167 million in 2022 and Taxation fell from $187 million to $115 million.
At the close of the financial year, cash and short term deposits amount to $1.7 billion, giving it much dry powder to increase lending if viable opportunities arise. Shareholders’ equity increased to $2.11 billion at the end of March from $1.96 billion in 2022.
The company is a work in progress as it attempts to recover from losses suffered in its loan portfolio from 2020 to 2022, this is an area of above average potential growth, but there have been few signs that the company will be more aggressive in this potentially lucrative segment of the financial market.
The stock is listed on the Junior Market of the Jamaica Stocks Exchange and last traded at $2.35 with a PE ratio of 14 times 2023 earnings. Investors need to watch this one for possible recovery.