Lasco Distributors stock rose 85 percent since the middle of April but profit results released since then show strong full year results to March, with an increase of 33 percent to 39 cents per share, followed by impressive first quarter numbers almost guaranteeing another big rise in the price over the next several months.
Lasco released first quarter results, in late July, with a rise in pretax profit jumping a robust 57 percent to $602 million and post-tax climbing a solid 38 percent to $448 million from a 17 percent rise in revenues to $7.3 billion from $6.3 billion.
The company generated other income of $68.6 million, surging 142 percent from $28 4 million in 2022, but unrealized investments gains fell from $58 million to $13 million, pushing total comprehensive income to $460 million, 20 percent up from $383 million in 2022.
The cost of goods sold rose at a much slower pace than revenues at 15 percent to $5.98 billion from $5.18 billion. Gross profit jumped well in excess of the rise in revenues, with a 25 percent climb to $1.34 billion from $1.07 billion in 2022.
Administrative and other expenses rose 12 percent to $806 million from $718 million in 2022. Depreciation charge fell from $38.7 million to $31.5 million in the latest quarter, there was virtually no interest cost with borrowings having been repaid.
The quarterly result is continuing” the performance of the prior year, delivering growth in all key segments” John Dasilva, Managing Director, stated in his report to shareholders, and went on to state, “the company continues to invest in consumer focused marketing initiatives while increasing its distribution and product availability across all channels”, in his report accompanying the quarterly.
The operations, generated $484 million of Gross cash flow and $814 million after working capital movements and ended with $748 million, with net cash inflows that swell the funds on hand to $3 billion.
Current assets ended the period at $11 billion, which was similar in 2022. Trade and other receivables amount to $3.6 million, with short term investments, cash and bank balances closing at $3.6 million, while inventories amount to $3.76 billion and receivables $3.6 billion. While receivables were close to the June 2022 and fiscal year end numbers, inventories fell by $700 million from the March year end balance. Current liabilities ended the period at $4.6 Billion. Net current assets ended the period at $6.5 billion up from $5 billion at the end of June 2022.

Lasco Distributors profit rises

At the end of June, shareholders’ equity amounts to $8.9 billion, up from $7.36 billion at the close of June 2022.
Earnings per share for the quarter was 13 cents, up from 9 cents in 2022. IC Insider.com computations project earnings of 65 cents per share for the fiscal year ending March 2024, with a PE of just 6 times current year’s earnings based on the price of $3.86 the stock traded at recently on the Jamaica Stock Exchange Junior Market. Net asset value ended the period at $2.53 with the stock selling at 1.5 times book value.
The company paid a dividend of 10 cents in July 2023, a payout ratio of roughly 26 percent of the 2023 annual profit.
Investors were underrating the stock earlier the year, selling it well below an appropriate valuation of a mere 8 times the nine months results of 27 cents per share when the stock traded at a low of $2.09 in April and close to that price for most of the month. Although the stock has nearly doubled, it is selling at just 10 times 2023 earnings and well below the 2024 earnings of 65 cents, which makes the stock a solid buy for the medium term investment.
Currently selling outnumbers buying interest but with rapidly improving results that will not last forever and patient investors will win in the end.