Lasco Manufacturing profit climbs 19%

Lasco's new I Cool drinks - demand exceeded supply in the December quarter

Lasco’s new I Cool drinks – demand exceeded supply in the December quarter

Lasco Manufacturing enjoyed a 24 percent jump in revenues for the December 2014 quarter to $1.25 billion over the same period in 2013. Net profit however, increased by lesser 19.5 percent to $158 Million resulting in earnings per share of 4 cents.
Revenue for the nine months to December increased by 16 percent to $3.3 billion. “This performance was mainly due to increased sales volume in the export markets as well as the introduction of the iCool line of products. The export division revenue year to date, shows a 53 percent growth over the same period in the 2013” Dr. Eileen Chin, Managing Director stated in her report accompanying the financials. Additionally, finance cost increased in the quarter, as well as year to date, with the quarterly figure rising 180 percent to $45 million and the nine months, to $102 million from just $18 million in the prior year’s nine months period, much faster than the increase in revenues. The increases above helped to pressure profit for the period, resulting in slight 5 percent reduction in net profit for the nine months, amounting to $426 million, from the prior year.
LasMn 12-14“There was also an increase in operating expenses during the period due to a significant investment in marketing to support and promote the introduction of our new iCool line,” Chin also states in her report. “Operationally, we are meeting our growth milestones. Lasco Manufacturing is well positioned in the current environment to deliver increased growth. We have completed a significant transformation that provides us with a strong asset base. Importantly, we expect strong growth in the 2015-16 financial year driven by ongoing success in our local and export markets. The integration of our business process and product extension portfolio has contributed positively to this quarter’s results. This integration is also expected to have further positive impact on profitability during the 2015-2016 financial year. We are on target to deliver on the promise to improve efficiencies and productivity, reduce operational costs, and increase product portfolio, sales and profitability”, said Chin.
Lasco recorded gross profit margin of 30 percent, in the December quarter from 23 percent in the same period in 2013, the margin, year to December, is 37 percent. Administrative and marketing expenses were flat in the quarter and up 29 percent year to date, compared with the prior year.
Earnings for the full year to March should end up around 15 cents per share. With new products to be added to its portfolio when the dry products factory is activated, revenues going forward should grow strongly. Increased finance cost and depreciation charge will be a drag on earnings for a while. At a stock price of $1, the stock is a buy to benefit from strong future income and above average profit growth.
Shareholders’ equity stood at $3 billion at December, borrowed funds stands at $1.4 billion. Work in progress stood at $2.26 billion, this amount relates to the dry product factory and when completed will swell fixed assets to $3.3 billion but it will result in increased depreciation charge and the funding for it will result in finance cost hat was being capitalised being expended against revenues.

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Comments

  1. Do yo expect a pull in prices sometime soon in June or so before a big increase in share price?

    • IC Insider says

      I don’t really expect much in price pull back as such adjustment usually comes in mid May to early June. Of course with the strong gains for some stocks profit taking can be expected but probably most of that is on its way out.

  2. For the past two years LASM has not paid dividend. What do you expect from this stock, as it relates to the payment of dividend?

    • IC Insider says

      I am not sure since they incurred much debt in building out the new factory. But that is now ending so they should be back with a payment later this year or 2016.

Trackbacks

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  5. […] units, the price rose 16 cents to $1.81, for a new all-time high. There was dealing in 43,000 Lasco Manufacturing’s shares as the stock closed unchanged at $1.40, Medical Disposables contributed 143,000 shares with […]

  6. […] between $1.60 and $1.71 but the price lost 2 cents to $1.65. There was dealing in 201,993 shares of Lasco Manufacturing, the stock closed with an 11 cents rise to $1.40, Paramount Trading ended with just 2,543 units […]

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  15. […] Chin has resigned as the Managing Director of LASM with effect from March 2, 2015 a release from LASCO Manufacturing Limited (LASM) announced. The company advised that Robert Parkins has been employed with effect from March […]

  16. […] with 129,060 shares trading at $1.50, Lasco Financial ended trading with 1,900 units at $1.15, Lasco Manufacturing closed with 500,470 units to close at $1.15 and Medical Disposables finished with 20,000 shares at […]

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  18. […] 5 securities that had no stocks being offered for sale. Stocks trading in the junior market are, Lasco Manufacturing closing with 20,000 shares as the price climbed 8 cents to $1.27, Paramount Trading ended trading […]

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