2022 turning out to be ‘banner year’

Durrant Pate/Contributor

Stationery & Office Supplies (SOS) Limited chalked up another record quarter, as business continues to boom having recovered from the pandemic and global supply chain challenges.

The July to September 2022 quarter produced the highest revenues in a quarter in the stationery and office supplier’s 57-year history, totalling J$473 million, surpassing the previous high set in the first quarter of 2022 by approximately J$46 million. This was an 11 per cent increase year-over-year.

SOS experienced significant improvements in all financial areas compared to the same period in 2021 including pre-tax profit, which climbed 345 per cent to J$87.2 million. At the end of the third quarter, SOS’s total assets increased year on year by 23 per cent to $1.1 billion, up from J$907 million last year.

This increase in total assets was due to a 30 per cent increase in inventory, which moved from J$280.5 million in 2021 to J$356 million for the period under review. Bank and cash rose by 59 per cent ($63.4 million – J$99.3 million) while receivables and prepayments rose by 56 per cent as SOS increased its inventory levels.

Earnings per share for the third quarter of 2022 was J$0.35, an increase of J$0.27 compared to J$0.08 at the end of Q3 in 2021. For the nine months ended September 30, 2022 earnings per share now stands at J$1.04, up J$.73 from $0.31 seen at this time in 2021.

Factors contributing to positive financial returns  

SOS cited four factors, which contributed to the positive third quarter and combined three quarter returns. The four factors are the new EVOLVE line, SEEK factory expansion, rebound in SOS’s Montego Bay branch and upgrade to its showroom facilities.

The EVOLVE line, which has been a work in progress for the past year saw the first container finally arrived at the beginning of August. The first set of products has been well received and in just the first three months generated revenues of J$13.2 million.

The demand for these new products is high, and has allowed SOS to place orders for an additional three containers to be in stock before the end of 2022. The SEEK product line continues to grow and the expansion of the factory in June of this year, resulted in immediate improvements.

For the third quarter, SEEK sales grew by 66 per cent over the same period in 2021. This is a result of the new machinery and man power and the ability to produce additional products.

During the quarter, the Montego Bay branch continued to rebound as business continued to grow and hotels reopened. Sales increased to J$60 million from J$33 million in 2021.

SOS continued to upgrade its facilities, expanding its showroom to allow for the display of additional products (including the EVOLVE line) as well as to make the area more comfortable and appealing for customers. Since the completion of the upgrades that also included additional parking, SOS has seen an uptake in persons visiting the location, which has definitely had a positive impact on sales.

2022 SOS banner year

For the company, 2022 has been described as a banner year with the first nine months of the year continuing to set historically high results and headed towards its best year in its history. By the end of August, SOS had already eclipsed its revenues amassed during the entire year 2021 and has more than tripled its pre-tax profit by the end of the third quarter compared to the same period in 2021.

During the nine-month period, sales from Montego Bay branch have more than doubled for the year, so far increasing from J$84 million to J$174 million. This is attributed to the reopening of the tourism sector as well as the addition of several new call centres recently opened.

Sales in document destruction has increased by 51 per cent during 2022. This is an area that many companies were hesitant to use during COVID but are now destroying old files to create additional productive space within their organisations.

For the year to date, SEEK sales have exceeded expectation sand are 77 per cent higher than the sales for the same time period in 2021. Warehousing equipment sales, including racking, mobile ladders and hand trolleys have increased by 20 per cent during 2022.

Additional inventory, which has risen by almost 30 per cent (J$280 million – J$356 million), has allowed the company to have increased quantities of products on hand to satisfy customers’ needs right away. One group of products that has seen a large increase in sales due to the availability is metal furniture (filing cabinets, storage cupboards, and pedestals), which has resulted in increased sales to date of 49 per cent for 2022.