Publicly owned Jamaican full-service hardware store, Lumber Depot registered a big 62 per cent increase in profits during the first six months of its 2021/2022 financial year.

The six-month period ending October 31, 2021, saw Lumber Depot posting profits of $107 million and revenues of $760 million, an increase of nine per cent relative to the prior year. 

Revenues and profits for the October quarter were directly affected by the lock-down period, which was effected during the late summer to combat a rise in COVID-19 in Jamaica.

The lockdown resulted in 17 lost sales days during the quarter and unprecedented disruptions to the construction planning and work cycle as well as to the supply chain for construction inputs.

Against this backdrop, the board of Lumber Deposit says it is satisfied to have been able to maintain both revenues and profits for the second quarter at that same level as the prior year.

Lumber Depot operates a full-service hardware store in Papine that serves the needs of medium and small-scale building contractors, as well as homeowners and service professionals doing construction projects, renovations and repairs.

Lumber Depot benefits from the favourable corporate income tax treatment associated with being listed on the Junior Market of the Jamaica Stock Exchange (JSE). Lumber Depot has established a market-leading position in the communities it directly serves.

The company benefits from its strategic location in Papine, which allows it to effectively provide hardware products to areas of the city now experiencing significant high-quality commercial, light-industrial and residential real estate development.

Management initiative to address supply chain concerns

Along with the core competitive strengths of Lumber Depot, the financial performance during the first half benefited from management initiatives to manage the supply chain issues by leading the market in securing adequate stock levels for all key hardware items while limiting price increases wherever practical.

The management also worked hard to maintain commercially reasonable opening hours and staffing levels throughout the most challenging periods of COVID 19 curfew arrangements.

The board and management remain very optimistic about the prospects for the Jamaican economy and for the construction sector noting that curfews, travel restrictions and new workplace rules have presented risks to its supply chain.

These risks have strained consumer and business confidence, whilst increasing volatility in commodity prices, exchange rates and some borrowing costs in the short term.