Business
JM | Sep 12, 2021

Lumber Depot reports 140% increase in three months net profit

/ Our Today

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 Successful efforts to negotiate adequate stock levels owing to profitable performance

Publicly traded Jamaican hardware company, Lumber Depot Limited had an outstanding first quarter with profits jumping by over 138% to $71.8 million, up from the $29.91 million booked in 2020.

Revenues for the first quarter ended July 31, 2021 went up to of $420 million, an increase of 16% relative to the same period last year.

Lumber Depot, which operates a full service hardware store in Papine, has been in business for over 20 years, establishing itself as a market leader in the communities with it directly served.

Commenting on the strong financial performance, the management reports that, “along with the core competitive strengths of Lumber Depot, the strong financial performance during the first quarter was directly related to successful efforts to negotiate adequate stock levels and reasonable cost prices for all key hardware items while maintaining fair selling prices to the market.  We also worked hard to maintain commercially reasonable opening hours and staffing levels throughout the COVID 19 pandemic.”

Gross profit went up by more than 40%

Lumber Depot

Gross profit for the period closed at $103.47 million, which is up by more than 40% in comparison to the 2020 posting of $66.58 million. Cost of sales for the period amounted to $316.61 million compared to the $294.62 million posted last year.

The company, which is affiliated to Blue Power Group, reported an impairment gain on trade receivables of $6.44 million relative to the loss of $2.46 million a year prior.

Administrative and other expenses closed the period at $36.75 million, 6% higher than the $34.79 million in the three months ended July 2020.

As a result, operating profit amounted to $73.22 million, up 150% relative to the $29.33 million reported in 2020. Other income amounted to $642,855 and finance income totalled $549,013 for the three months ended July 31, 2021.

Additionally, finance cost for the first quarter amounted to $2.63 million, 4% higher than the $2.53 million reported twelve months earlier.

As a result, net financial cost closed at $2.08 million compared to $147,166 in 2020.

Balance Sheet at a glance

As at July 31, 2021, the Company reported total assets of $569.13 million, an increase of 29% from the $442.43 million as at July 31, 2020. This mainly constituted to ‘Cash and cash equivalents’ which closed at $150.45 million relative to the $98.78 million booked in 2020.

Shareholders’ Equity as at July 31, 2021 was $394.89 million relative to $222.15 million booked a year prior. This resulted in a book value per share of $0.559 (2020: $0.315).

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