Durrant Pate/Contributor

Lasco Financial Services and its micro finance subsidiary, Lasco Microfinance, have cut staff in a redundancy exercise, which occurred during its June first quarter.

This resulted in the redundancies of some 15 positions, as the entities pushes to consolidate resources and maximise value. As a result, operating expenses for the first quarter amounted to J$506.52 million, representing an 18 per cent increase relative to J$430.96 million reported in 2022.

The company notes that, “our first quarter was a turning point for the business as we implemented several organisational changes to drive more efficiencies.” The expenses associated with these separations are reflected in this quarterly returns.

Increases in admin expenses

Administrative and other expenses rose by 22 per cent to close at J$327.84 million (2022: J$268.03 million), while selling and promotional costs increased by 10 per cent from J$162.92 million in 2022 to J$178.68 million for the quarter under review.

Lasco Financial highlighted that “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 reorganisation to drive efficiencies and control future costs. With lowered fixed costs, we anticipate stronger results for the rest of year.”

During the first quarter, Lasco Financial saw a negligible decline in trading income totalling J$539.18 million compared to J$539.99 million in the corresponding three months last year. Other income amounted to J$35.18 million (2022: J$24.50 million), which is an increase of 44 per cent year-over-year.

Profit from operations for the three months amounted to J$67.83 million, a 49 per cent decrease relative to the $133.53 million reported in 2022. ‘Finance Costs’ totalled J$24.76 million, a seven per cent decrease from the corresponding period last year (2022: J$26.77 million).

Considerable decline in profitability went down

Pre-tax profit closed at J$43.07 million, a 60 per cent decline relative to $106.76 million reported in 2022. Taxation for the three months had a marginal decrease to reach J$24.25 million (2022: J$23.98 million), resulting in net profit for the June quarter amounting to J$18.82 million, a 77 per cent fall from the J$82.78 million reported in 2022.

Consequently, earnings per share (EPS) for quarter under review to J$0.015 (2022: EPS: J$0.065). Notably, Lasco Financial traded recently at a price of J$2.30 with a corresponding P/E ratio of 19.63x while its total asset closed at J$3.82 billion (2022: J$4.33 billion).

The company reports, “the key contributor to this decline is the reduction in our cash holdings. Lasco Financial has strong cash generating capacity which we leveraged to pay down our long-term loan with JMMB Bank by J$439 million or 42 per cent. This was a significant move for us to strengthen our financial position.”

Shareholder’s equity amounted to J$2.13 billion (2022: J$2.04 billion), representing a book value per share of J$1.66 (2022: J$1.60).