Cost cuts and moderate revenue growth were the drivers of profitability in 2020-2021

Lasco Manufacturing has proven its resilience managing to grow its profitability by 41 per cent higher for the year ended March 2021 to $1.37 billion coming from $981 million for 2020.

Growth in the fourth quarter was even better rising 83 percent to $367 million over that of 2020.

Pre-tax profit jumped a strong 83 per cent for the quarter, to $457 million from $249 million in the 2020 March quarter and 46 per cent for the 12 months to March, with $1.75 billion up from $1.2 billion in 2020.

The profit for the year under review is subject to full taxation as of October 12, last year.
Gross profit margin came in at 38 percent for the year, up from 37 percent of the 2020 fiscal year. 

Managing Director James Rawle acknowledged that the just ended financial year was a challenging one, primarily as a consequence of the COVID-19 pandemic, exacerbated by the severe health crisis, severe dislocations, volatility and uncertainty caused.

“Lasco Manufacturing was agile in adopting and instituting the necessary measures, protocols and processes to ensure businesses continuity and the minimisation of possible disruptions,” Rawle explained.

2020 was a strong year despite the challenges

Despite the challenges, the Lasco managing director declared that 2020 was a strong year for the company, in which the underlining operational and financial matrices showed solid growth in line with the company’s strategic objectives, ”reflecting the agility, adaptation and flexibility of our teams, the support of all our stakeholders and the overall resilience of the organisation”.

Revenues climbed four per cent for the fiscal year with $6.2 billion but were flat at $2 billion for the last quarter. Administrative and other costs fell 13 per cent for the year to March to $1.19 billion from $1.36 billion in 2020, resulting from a fall of $167 million in staff cost from $717 million to $550 million.

This was primarily as a result of the company incurring no share option cost in the year versus $185 million in the prior year. Selling and promotion expenses fell from $291 million to $137 million.

Finance cost dipped from $94 million to $59 million as the company continues to pay down loans that stood at $1.05 billion at the end of March 2020 to $820 million with $454 million earmarked to be repaid in the 2022 fiscal year. 

Taxation consumed much of company’s profit

Taxation consumed $376 million of profits, up from $217 million in 2020. Shareholder’s equity stood at $7.9 billion at the end of March 2021. 

Cash funds and investments amount to $2.35 billion after the company generated $1.6 billion in cash inflows, before working capital and capital financing needs and paying a dividend of $251 million.

Lasco generated earnings per share for the year of 33.2 cents, up from 23.67 cents in 2020.