Durrant Pate/Contributor

Productive Business Solutions (PBS) expects to close its strategic acquisition of Xerox operations in Ecuador and Peru by this month-end, which is the end of the company’s current second quarter of 2024. 

In its March first quarter shareholders’ report, management reports that it has successfully initiated the strategic acquisition noting, “It is a testament to our commitment to expanding our market presence and enhancing our service offerings in the Latin American region. The integration of Xerox operations in these key markets strengthens our capabilities in delivering expanded product/service and industry-leading solutions to a broader client base and offers a deeper Latin American footprint for our regional and global customers.” 

The Jamaican-traded regional business technology company expects that this transaction will close in the coming months subject to regulatory approvals.

During the Q1 period, PBS reported revenues of US$65.9 million, a contraction of US$21.6 million compared to the same period in 2023. ‘Earnings Before Interest, Taxes, Depreciation, and Amortisation’ (EBITA) for the quarter was US$8.5 million, down from US$10.2 million in the previous year. 

Profitability waned during the quarter

Additionally, net profit for the first quarter amounted to US$0.4 million, compared to US$1.7 million during the corresponding period in 2023. Notably, the first quarter results in 2023 were impacted by a large transaction in which PBS provided laptops to the government in El Salvador. This transaction produced a significant revenue contribution in that period but carried a lower-than-average gross margin.

As a result, PBS recorded higher gross profit in Q1 2024 relative to Q1 2023 despite a reduction in revenue. PBS’ gross margin for the first quarter of 2024 improved to 35.5 per cent from 26.5 per cent, which is more representative of the business without the influence of any large, non-recurring sales. Historically, the fourth quarter represents the strongest financial period for PBS, while the first quarter typically exhibits the lowest earnings. 

PBS says it expects to file its audited financial statements for 2023 by June 30, 2024. The audit has been delayed as a result of accounting corrections which impact revenue, cost of goods sold, and contract assets primarily in periods before 2023.

Company outlook

Regarding its outlook, PBS says its  “Pipeline of sales opportunities for the remainder of the year is strong. We expect PBS’ 2024 revenue, EBITDA and profitability to closely align with our full-year budgetary expectations. PBS connects the largest enterprise software companies in the world to the leading firms and governments in our region.”

Company chairman Paul B. Scott and group CEO Pedro M. París advise shareholders, ”The business is increasingly diversified by country, customer and supplier. Moreover, our growth reflects the enduring long-term trends of digital transformation to meet the needs of businesses and consumers. As we look ahead, we expect PBS to continue its trajectory of profitable growth.”