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LASCO Financial Continues To Benefit From A Buoyant Remittance Market But Reports Lower Net Income For Quarter

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Jacinth Hall-Tracey Managing Director LASCO Financial Services Limited Has Released The Following First Quarter Unaudited Financial Results.

LASCO Financial Services Limited (LFSL) is reporting net income for the first quarter of the 2022-2023 Financial year of $55.8M. This compared to net income of $74.9M which was generated in the corresponding 2021 first quarter. Net income decreased 26% from the prior year driven by higher expenses and lower revenues.

There were new expenses introduced for the quarter including costs associated with placing Visa cards in market.

Revenues decreased by 5% from the prior year from $591.0M to $564.5M, as lower Cambio spreads and lower interest income from loans offset the gains from the increased remittance activities.

LFSL still continues to benefit from a buoyant remittance market and now anticipates the additional revenues from its card business in the second quarter.

Profit from Operations ended the period at $111.9M, 29.3% lower than the previous year. However, there was a $20.9M savings in finance costs which ended in profit before tax of $85.1M, whereas earnings per share of $0.438 decreased 25% from the prior period, reflecting the lower net income.

We continue to see the resilience in our business lines in spite of the challenging market conditions.

We navigated the environment very well aided by the mix in our key drivers which allows us to provide a complementary suite of services geared at financial inclusion for our core customer segment.

We continue to tweak our strategies to respond to market conditions and expect improvements in income once our full suite of services are rolled out.

Total assets increased marginally year over year by $346.3M million or 8.7% to close the quarter at $4.3M.

Cash and short-term deposits increased by $457.0M over the corresponding period.

Our subsidiary, LASCO Microfinance (LASMF) a Development Bank of Jamaica (DBJ) accredited institution and is a partner institution to disburse the SERVE loans facility to onlend funds to SMEs in direct support of the recovery initiative for SMEs. Additional funds were released within the quarter to support the demands.

We are heading into the new financial year with great anticipation that the strategies and plans we have implemented will manifest as intended.

We are fully cognizant that as a Money Service Business largely acting as an intermediary, there are several elements in our business for which we have no control. Our success has always been, however, in our response: our ability to adapt and our broad vision of the future of our business and our continued relevance.

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Higher Operating Costs And Margin Pressures Impacted Main Event’s Overall Q1 Profitability.

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Entering 2025 with a strategic focus on expanding revenue streams, strengthening client relationships, and maintaining financial discipline, the Company achieved revenue growth.
However, higher operating costs and margin pressures impacted overall profitability.

The Company reported revenues of $585.03M, representing a 3% or $17.28M increase over the $567.75M recorded in Q1 2024. This growth was primarily driven by a significant increase in revenue contribution from a previously underperforming segment, reflecting the success of targeted expansion efforts. While revenue remains below prior peak levels, the Company continues to recalibrate and drive demand through expanded service offerings and strengthened client engagements.

Gross profit for the quarter stood at $301.67M, reflecting a 4% decline from $315.82M in Q1 2024. This decline resulted from higher direct costs associated with event execution, infrastructure upgrades, additional non-recurring costs incurred during the period, and increased labour costs related to service delivery. Consequently, the gross margin contracted to 51.56% from 55.63% in the prior year. The Company remains focused on managing costs effectively to support long-term profitability.

Operating expenses increased to $218.72M, up 7.5% from $206.35M in Q1 2024. This rise was attributed to planned administrative enhancements, a significant one-off expenditure for the Company’s 20th Anniversary celebration, higher personnel costs, increased security and fuel expenses, and a 51% increase in amortisation expenses to $11.36M due to renegotiated lease agreements and the addition of a new lease.

Operating profit stood at $87.48M, a 24% decline from $115.28M in Q1 2024. Increased finance costs, stemming from renegotiated lease agreements and new lease additions, also impacted results.
Net profit for the quarter amounted to $73.67M, a 27% decrease from $100.25M in Q1 2024, influenced by lower gross margins, increased operational costs, and higher impairment charges. As a result, earnings per share (EPS) fell from $0.33 in Q1 2024 to $0.25 in Q1 2025.

Total assets grew by 6.4%, reaching $1,306.01M, up from $1,227.37M in Q1 2024. This increase was primarily driven by a 53% rise in receivables, reflecting expanded customer engagements, with several balances stemming from events executed near the period’s end. Short-term deposits increased to $250.24M from $236.50M, while cash and bank balances declined by 30% to $131.74M from $188.91M due to timing differences in collections and reinvestments.

Shareholders’ equity strengthened to $956.17M, reflecting a 5% increase over $912.66M in Q1 2024. This growth was primarily supported by retained earnings, demonstrating the Company’s ability to generate and reinvest profits efficiently.

Payables increased by 47%, rising to $229.58M from $156.38M in Q1 2024, mainly due to the timing of event executions towards the end of the quarter, resulting in higher accrued expenses related to supplier payments.

While the macroeconomic environment remains uncertain, the Company remains optimistic about the upcoming quarters. The focus will be on enhancing operational efficiencies to manage cost structures effectively and strengthening revenue streams through deeper market penetration and strategic partnerships. Additionally, the Company intends to use owned-events as a driver of revenue growth.
Our continued success is a testament to the dedication, creativity, and resilience of our exceptional team. Their ability to adapt and innovate in a dynamic industry ensures that we consistently exceed expectations and deliver outstanding experiences. Their dedication was especially evident during the holiday period, where they worked tirelessly to execute high-quality events, ensuring continued excellence in service delivery. We also recognise and appreciate the unwavering guidance of our Board; whose strategic leadership continues to drive our company’s growth and long-term vision.

Solomon Sharpe Chief Executive Officer

For More Information on Main Event Entertainment Group Limited (MEEG) Unaudited Results, Q1 – Three Months Ended January 31, 2025 (Revised) Click Here

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