Lasco Financial EPS hides profit plunge

May 31, 2023 by

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.

Jacinth Hall-Tracey, Managing Director of Lasco Financial.

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.

Filed Under: Company News, Company Results Tagged With: , , , , , ,

Q2 profit climbs 26% at Lasco Financial

November 5, 2022 by

Profit climbed a respectable 26 percent for the September 2022 quarter to $74 million from $59 million in 2021, for Lasco Financial Services, with the six months’ profits climbing 17 percent to $157 million over the $134 million garnered in 2021. 
The improvement in profit arose from a 12.5 percent rise in income to $623 million for its second quarter to September against income of $554 million in the 2021 second quarter. Importantly, the performance of the September quarter exceeds that for the June quarter, when revenues came in at $564 million with profits of $56 million, suggesting that growth of revenues and profitability could be accelerating quarter over quarter and not only year over year.
For the half year, revenues rose just 3.7 percent to $1.188 billion from $1.145 billion for the six months in 2021.
For the 2022 September, quarter expenses excluding finance costs rose 11 percent to $469 million from $424 million in 2021 as administrative and other expenses climbed 18 percent to $324 million from $275 million in the 2021 September quarter and selling and promotional expenses declined from $150 million in the September 2021 quarter to $145 million in 2022. For the six months, total expenses increased by just 5 percent, from $857 million to $900 million. Administrative expenses increased 7 percent to $592 million from $555 million in 2021, Management reported that the increase is “in line with the expansion of services and growth in staff.” Selling and Promotional expenses rose marginally to $307 million from $302 million for the same period.
Finance costs fell from $46 million to $28 million in the September 2022 quarter and from $93 million for the September 2021 half year to $55 million in 2022. Taxation more than doubled from $25 million to $52 million in the September quarter and increased from $61 million in the six months to September 2021 to $76 million in 2022.
Earnings per share came in at 5.8 cents for the September 2022 quarter and 12.3 cents for the half year. With the December quarter usually generating the largest income and profit, ICInsider.com projects earnings of 50 cents for the year ending March 2023 and 90 cents per share for 2024. The outcome could be even better if the loan portfolio that was nearly $2 billion in 2019 grows back fast enough from the $812 million net of loan losses it fell to in March this year. Based on the earnings per share, the company’s stock trades at a PE of just 5.4 compared to an average of 12.6 for the Junior Market and just three times 2023 earnings, based on the closing price of $2.72 on Friday making the stock a strong buy.

Lasco Financial profit dropped 39% in 2018 Q2.

The company moved to expand its loan portfolio. Management points to a reduction in cash resulting from an “increase in loan disbursements as we make a push to expand our portfolio and market share”, management states in the commentary to shareholders.
Shareholders equity stood at $2.1 billion at the end of September this year, up from $1.84 billion at the end of September 2021, while borrowed funds amount to $1.5 billion, down from $1.64 billion at the end of September last year. Loans and receivables rose to $1.5 billion from $1.4 billion in September last year and cash and cash at bank and short term deposit amount to $1.64 billion versus $1.7 billion in 2021.
During the six months, $278 million in cash was provided from operating activities compared to $376 million in 2021, after $523 million was used in investing and financing activities cash and bank balance fell $244 million and reduced cash and cash equivalent to $722 million from $897 million in 2021.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , , , ,

8 Junior Market stocks that should split

June 12, 2022 by

Stock splits and bonuses are two tools companies have in their tool kit to deliver value to their shareholders if used appropriately. Interestingly while the Scotia Group has used these tools repeatedly for the past several decades, Directors at NCB Group have frowned on the practice seeing no value to the group.
The critical point is that directors run a company for the benefit of shareholders not solely for the benefit of the company. Shareholders are kings and queens of the companies they own shares in and directors should not lose sight of that factor.
Some companies have split their stocks and investors love the results of these splits as they see where the values have mostly gone up, before and after the split. Some companies like the Lasco group have handled the split badly by overdoing it and creating too much liquidity that kills the value of the stock for years. The split is also an indication that a company’s profit is likely to grow short term which would cause the stock to struggle as the price gets more expensive without the split.
A look at the Junior Market shows 27 of the 45 companies listed trading below four dollars, with seven priced at more than twice $4. The price differential between the two groups suggests that a stock split is warranted if management is serious about the minority shareholders as well as creating the liquidity in the stock to maximize publicity from listing.
The seven companies are Access Financial, with only 270 million issued shares, with a stock split well overdue that will result in improved liquidity and build interest in it. Cargo Handlers at $11.50 has limited liquidity and needs a split to build back excitement into trading it. Dolphin Cove is the third one with the price at $15.25 and recently much higher, but the majority owner may not be so inclined to go the route of a split, but one never knows as local shareholders could well prevail on them to do so. Fosrich now trading around $27, is proposing a 10 to 1 stock split at the Annual General Meeting (AGM) this month. Honey Bun trading at $8.50 has the potential to move up to the $20 region later this year or early in 2023 and warrants a second split, having done one a few years ago.

Fosrich to vote on a 10 to 1 stock split at the coming AGM this month.

Back in 2020, management of ISP Finance had indicated that a split was on the cards, but even with the stock at more than $22 and highly illiquid with less than 3 percent of shares freely available for regular trading action to split the stock is nowhere in sight. Main Event is just at the borderline at $8.20 so a split may be in the future when it has fully recovered from the loss in business, with the advent of the covid-19 pandemic. There are 300 million shares issued with the top 10 holdings accounting for 93.5 percent. Stationery and Offer Supplies hinted at a past AGM that they had looked at it but felt the time was not right. The time may well be very close with the price trading recently around the $12 region with record profits expected this year a split could well happen with the AGM coming up later this year. The company has only 250 million shares issued of which 90 percent are held by the Top10 shareholders. Medical Disposables trades at $7-8 region, with the price not yelling for a split just yet but if management is smart they would split the stock with only 263 million shares issued, a two for one basis as rising profit this fiscal year will probably put the price to around $5 after such a split when all is said and done.

Filed Under: Company News, General Business News, JSE Junior Market, Stock Market Tagged With: , , , , , , , , , , , , , , , ,

Lasco’s Q1 interest income jumps 42%

September 8, 2019 by

Lasco Financial enjoyed increased revenues but slightly lower profit in Q1.

Growth in revenues can be a good indicator to identify good future investment candidates even if profits may be moving slowly. By that measure, Lasco Financial is a good stock to watch for future growth.
The company reported strong growth in revenues but virtually flat profit results in the first quarter to June. Interest income grew a strong 42 percent to $219 million from $154 million in 2018 helping to grow overall operating income to $586 million, up 11 percent from $526 million in the June 2018 quarter. Annualized, interest earned is set to exceed the $781 million earned for the fiscal year to March 2019. Other income rose to $69 million from $28 million in 2018.
While the top line moved up well, the gains were overtaken by the faster increase in expenses. Administrative and other expenses climbed 23 percent, to $247 million from $200 million while selling and promotional expenses moved up 26 percent to $230 million from $182 million. Finance cost rose to $49 million from $41 million in 2018 while taxation charge increased to $39 million from $31 million in the 2018 first quarter.
Provision for loan losses amounting to $84 million, was made in the quarter, with none in 2018. The increase in loan losses played a major part in keeping the 18 percent rise in revenues from bettering the $101 million profit realized in the 2018 quarter and ending with $91 million.

Lasco Financial Money Gram

Excluding the loan loss provision, profit before tax would have risen by 62 percent and lead to earning per share rising from 7.2 cents to 11.7 cents or close to 50 cents per share for the full year. Loan loss provision for the 2019 fiscal year was $215 million net of recoveries and seems set to exceed this amount by the year-end with the growth in the loan portfolio.
Total assets increased year over year by $481 million to $4 billion with loans and receivables rising to $2.66 billion from $1.85 billion at the end of June 2018 and $2.37 billion in March 2019. The increase was partially funded by a reduction in cash and short-term deposits that fell to $125 million from $456 million in June 2018 and is down from $283 million as of March this year. Shareholders’ equity rose to $1.68 billion from $1.47 billion at the end of June 2018. Lasco’s borrowings rose from $2 billion to $2.2 billion over the same periods to help finance the growth in loans.
Lending is the area of growth for Lasco Financial and the pace seen the first quarter could carry through for the rest of the year and have a domino effect on revenues and profit. The company’s shares are listed on the Jamaica Stock Exchange Junior Market and last traded at $5.50 with a PE of 9 times estimated 2020 earnings.

 

Filed Under: Company News, Company Results Tagged With: , , ,

Lasco Financial beats 2017 profit in 9 months

January 30, 2018 by

Lasco Financial reports profit for 9 months at $222 million.

Lasco Financial’s profit for the nine months to December, has already eclipsed the full 2017 fiscal year profit of $188 million as nine months profit climbed 36.6 percent to $222 million, from a 35 percent revenue increase from $830 million to $1.12 billion.
Profit after tax, suffered a decline in the third quarter, falling to $54.7 million from $62 million in 2016, as revenues increased by 36 percent to $405 million from $298 million in the 2016 period. The results reflect just one month’s of CrediScotia’s operation.
Responding to the growth in the December quarter results, Lasco’s Managing director, Jacinth Hall-Tracey stated in her report to shareholders, “This is attributed to seasonally strong remittance and cambio inflows bolstered by the income from its new acquisition of CreditScotia, renamed LASCO Microfinance. After recognizing some direct expenses for the acquisition and normal seasonal operational increases, profit from operations for the quarter closed at $91.4 million, an increase of 18.5 percent.” Interest cost associated with the funding of the acquisition was pushed up by $20 million in the quarter and reduced the positive gains in operating profit below pretax profit in 2016 of $75 million to $69 million.
Administrative and other expenses, jumped a sharp 63 percent to $179 million in the third quarter, but for the nine months, it rose by a more moderate 41 percent, to $531 million, well ahead of the increased revenues. Marketing cost rose 22 percent in the quarter to $135 million and 20 percent for the nine months, to $389 million.
Total assets jumped from $1.55 billion at the end of March 2017 to $3.3 billion with the acquisition of the CrediScotia shares, funded by $1.27 billion from by short-term loans, from related companies. The short-term loans will be repaid in full from a long term instrument being arranged.

Access Financial has assets of $3.3 billion at September 2017.

The acquisition pushed Lasco’s assets to the same amount that Access Financial had at the end of September. There are two differences, Access Financial is valued by the stock market at twice the market value of Lasco’s market value of $6.6 billion, with Access at $11.55 billion. Access’s loan portfolio stood at $2.68 billion at September while Lasco is less than $1.5 billion at the end of December last year.
According to the quarterly report, in the coming months, the loan business will be combined into the subsidiary company. The combined businesses own a network of 13 branches, a large customer base and a billion dollar loan portfolio.
The company looks like it will end 2018 fiscal year with profits around $300 million level with earnings per share of 25 cents. The stock last traded on the Junior Market of the Stock Exchange at$5.24 at a PE around 20 times current fiscal year’s earning, but the focus will be on the next fiscal year when the full benefits of the acquisition of the CrediScotia is fully reflected in the results and one off cost are removed.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , , , , ,

Lasco Financial setting for profit explosion

July 24, 2017 by

Lasco Financial enjoyed decent gains in profit for Q1

Revenues at Lasco Financial Services jumped 22.4 percent for first quarter over the similar 2016 period to reach $319 million for an increase of $58.5 million, but importantly trading income climbed 31 percent to $303 million.
According to Managing Director, Jacinth Hall-Tracey “this result represents year over year growth of and is being driven by our strategy of expansion which began in the previous financial year”.
Profit before taxation, moved from $69.7 million in 2016 to $81 million, a 16.5 percent increase with profit after tax increasing 15.8 percent to $66.9 million, compared with the corresponding financial period and resulting in earnings per share of 5.4 cents.
Total Expenses grew 24.6 percent over the 2016 quarter to $238 million with Selling and Promotion cost rising by 31 percent. The increase was “largely driven by increases in Selling and Promotion as we continue to push the LASCO Money consumer facing brand name. This brand has resonated well with our customers and has enabled us to fully explain all our services. Previously, most customers were only aware of our Cambio and MoneyGram services. This brand awareness has been paying off in the increased transactions in all our locations as our customers embrace our more friendly community brand,” Hall-Tracey advised shareholders in a release accompanying the financials.
In the previous financial year, Lasco began the implementation of a strategy to expand the Loans Division by adding a Business Loans Unit. This expansion gave rise to several new loan offices as well as an increase in administrative and sales staff. Increased focus on lending, resulted in 70 percent growth in the loan portfolio that should move the portfolio in the region of $340 million. At the end of March loans amounted to $282 million up 43 percent over the $197 million due at the end of March 2016, no figures for loan is disclosed in the quarterly.
The balance sheet shows assets of $1.54 billion, cash funds of $574 million and stockholder’s equity of $1.22 billion.
IC insider.com is forecasting earnings per share of 30 cents for 2018 and should go on to about double in 2019. Lasco Financial last traded on the Junior Market of the Jamaica Stock Exchange at $3.55.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , , , ,

Mild losses for Jamaican stocks – Thursday

December 22, 2016 by

The Jamaica Stock Exchange, suffered mild losses in the market indices in the morning session on Thursday. The important all Jamaica Composite Index sits just under 203,000 points compared to 204,535 in early trading on Wednesday.
ICI trd sht int -22-12-16Trading of note includes Supreme Ventures with 500,000 shares at $4.90, Lasco Financial Services with 208,325 units at $3.10 and Cargo Handlers traded at intraday high of $18.50 before falling back to $16 with 46,199 shares changing hands.
Market activity was moderate, resulting in only 15 securities traded at 10:45 am, compared to 22 on Wednesday at 10:45 am. A total of 3 securities advanced and 5 declined, resulting in a volume of 904,871 shares changing hands, carrying a value of $7,114,541, compared 488,203 shares changing hands carrying a value of $11,897,071 on Wednesday. The average number of shares traded, amount to 60,325 units versus 22,191 units on Wednesday.
The all Jamaica Composite Index slipped 81.33 points to 202,896.57, the Jamaica Stock Exchange Market Index shed 72.73 points to 185,800.17, the Jamaica Stock Exchange combined index lost 80.79 points to be at 198,279.00 and the junior market index pulled back 1.30 to 2,528.00.

Filed Under: JSE Combined, Stock Market Tagged With: , , , , , , ,

Majors climb in early trading – Tuesday

November 1, 2016 by

Trading is off to a moderate start in early trading on Tuesday with Scotia Group trading more than 1 million shares and CAC 2000 finally trading after news of its multi million law suit loss to end at $5.10, down from the last traded price of $6.30.
ICI int -01-11-16Reasonable volumes came from, Iron Rock Insurance with 94,434 units trading at $3.30, Lasco Distributors with 125,000 shares at $7, Lasco Financial with 494,451 shares changing hands at $3.25, Jamaica Broilers with 500,134 units at $14.50, JMMB Group 7.50% preference shares traded 506,000 units at $1.08 and Scotia Group accounting for 1,024,549 units at $31.50.
The all Jamaica Composite Index climbs 998.42 points to 186,327.87, the Jamaica Stock Exchange Market Index gained 892.76 points to 167,652.03, the Jamaica Stock Exchange combined index rose 816.00 points to close at 180,495.75 and the junior market index eased 1.17 points to 2,435.23.
At 10:30 am, a total of 24 securities traded, resulting in a volume of 2,927,694 shares changing hands carrying a value of $45,399,096, compared to 4,494,219 shares changing hands carrying a value of $8,329,082, on Monday.
The average number of shares traded amounts to 121,987 units compared to 224,711 on Monday. Market activity resulted in 5 stocks falling while the prices of 5 securities rose.

Filed Under: JSE Combined, Stock Market Tagged With: , , , , , , , , , ,

JSE rise in early trading – Friday

October 28, 2016 by

As the close of October approaches, the prices of stocks seem to be firming up on the Jamaica Stock ICI JSE int trd 28-10-16Exchange resulting in slightly more stocks rising than falling in the early trading session. Trading continues on moderate pace on Friday with all the market indices rising.
The all Jamaica Composite Index gained 440.70 points to 185,738.53, the Jamaica Stock Exchange Market Index grew 394.06 points to 167,125.05, the Jamaica Stock Exchange combined index climbed 664.11 points to close at 179,973.91 and the junior market index climbed 29.07 points to 2,432.01.
At 10:45 am, a total of 21 securities traded, resulting in a volume of 548,724 shares changing hands carrying a value of $3,478,798.
The average number of shares traded on Friday amounts to 26,130 units. Market activity resulted in 7 stocks falling while the prices of 8 securities rose.
In trading activity, Jamaica Producers gained 80 cents in trading 123,880 shares at $8.30, KLE Group fell from $1.79 to $1.30 with 102,077 shares, Lasco Financial Services traded 110,000 units at $3.10, Sagicor Real Estate X Fund has so far traded 56,372 shares at $10.20, Proven Investments 33,550 units at 19 US cents.

Filed Under: JSE Combined, Stock Market Tagged With: , , , , , , , ,

JSE majors drop sharply

October 12, 2016 by

The Jamaica Stock Exchange market stocks indices fell in Wednesday morning with big fall in the main market indices trading with volume increasing over Tuesday’s levels.
ICI JSE int trd 12-10-16The all Jamaica Composite Index dropped 2150.07 points to 185,347.93 the Jamaica Stock Exchange Market Index dived 1,922.55 points to 166,775.78, the Jamaica Stock Exchange combined index slipped 1,858.71 points to close at 179,394.69 and the junior market index dipped 7.37 points to 2,407.16.
At 10.45 am, a total of 22 securities traded, resulting in a volume of 1,599,416 shares changing hands carrying a value of $10,753,662, compared to 2,592,474 shares changing hands carrying a value of $31,641,641 on Tuesday.
The average number of shares traded amounts to 72,701 units compared to 92,588 on Tuesday. Market activity resulted in 6 stocks falling while the prices of 9 securities rose.
JMMB Group traded 56,992 units and lost $1.50 to trade at $13.50, Scotia Investments jumped to $34 from $30 while trading 26,000 units, Blue Power Group pulled back from $28 that it closed at on Tuesday to $23.50 on small volume and Lasco Financial Services dropped to $2.80 from $3.20.
Jamaica Money Market Brokers 7.50% preference share had 355,130 units trading at $2.10, Caribbean Flavours & Fragrances traded 820,700 and rose to $8.60 from $8, Cable & Wireless traded 103,300 units at 98 cents.

Filed Under: JSE Combined, Stock Market Tagged With: , , , , , , , ,