Businessuite Markets
Lasco Financial Services Boasting Robust JA$1B Cash Balance To Support Growing Loan Portfolio
Jacinth Hall-Tracey Managing Director for Lasco Financial Services Limited has released the following Three Months April – June 2023
Three Months Business Performance Highlights
574.4 million dollars in Income
Up 1.75 percent above the corresponding 2022 period
An increase of $9.8 million dollars
67.8 million dollars Profit from Operations
Down 49.2 percent below the corresponding 2022 period
A decrease of $65.7 million dollars
18.8 million dollars Net Profit for the period
Down 77.3 percent below the corresponding 2022 period
A decrease of $63.9 million dollars.
Our first Quarter was a turning point for the business as we implemented several organizational changes to drive more efficiencies. This resulted in the redundancies of some fifteen positions between both companies (LASCO Financial and LASCO Microfinance) as we make efforts to consolidate resources and maximize value. The expenses associated with these separations are reflected in this quarter.
Income
LASCO Financial Services Limited (LFSL) is reporting consolidated income of $574.4 million for the first quarter of the 2023-2024 Financial year. This represents an increase of $9.8 million on income of $564.5 million which was generated in the corresponding 2022-2023 first quarter. The 1.75% increase was related to growth in trading gains, new services and fees.
Expenses
Consolidated expenses for the Quarter was $506.5 million, which was $75.6 million more than the previous corresponding period. Contributing to this increase is the $15.7 million in Selling and Promotions to support new services, and $58.8 million increase in administrative costs to support the deployment of new services, increased costs of operation and redundancy packages. Based on the plans in place for the new financial year, these key actions were needed in the first quarter to ensure we strengthen our foundation for a competitive year ahead.
Profitability
Profit from operations closed the quarter at $67.8 million compared with $133.5 million in the 2022-23 corresponding period. Profit after tax declined significantly to close the quarter at $18.8 million. Several foundational activities were embarked upon in the first quarter significantly increasing expenses, including increased advertising to drive awareness of our key services with the expectation of growth in the next three quarters and the reduction in permanent staff positions arising from reorganization to drive efficiencies and control future costs. With lowered fixed costs, we anticipate stronger results for the rest of year.
Total assets reduced year over year by $509 million or 11.8% to close the period at $3,819.5 million. The key contributor to this decline is the reduction in our cash
holdings. LFSL has strong cash generating capacity which we leveraged to pay down our long-term loan with JMMB Bank by $439 million or 42%. This was a significant move for us to strengthen our financial position. Our balance on long term debt now stands at $621.9 million to JMMB Bank and $138.8 million to the Development Bank of Jamaica. The $957.1 million long term debt also includes $197 million for lease liability.
Our cash balance remains robust at $1.0 billion to support our growing loan portfolio and daily operations.
OUTLOOK
The rapid changes in the capacity of technology is changing the way we conduct business and is driving a different earnings module which requires great scale in
customer transactional activities. It also requires strong investments in key financial technology and customer education to help customers transition to the digital
services. As one of the companies leading the change, it comes at great cost and requires us to be deliberate and strategic in our actions to emerge successful.
We have the basis for success having both traditional and on trend digital means of delivering remittance to our customers, our cambio business is able to respond to demand and has been growing, our loans business is reviving its growth in disbursements post covid and is expected to deliver a positive contribution this year.
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Businessuite Markets
Higher Operating Costs And Margin Pressures Impacted Main Event’s Overall Q1 Profitability.
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
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