AT the Lasco Annual General Meeting, held on September 30, 2014, Lascelles Chin, executive chairman of the Lasco Affiliated Companies, voiced his ambition to “double sales and profit, across all three companies, within the next three years’ time”.

He indicated that this would be achieved through expanded product offerings, increased exports, and more aggressive marketing of the Lasco product line as a brand which “offers the best quality products at the lowest price”. He also indicated that the distribution company will benefit from expanded warehousing of approximately 110,000 square feet over 8 acres of land, estimated to be completed by March 2015. Additionally, Mr Chin announced that Lasco had won its court case against Pfizer and is currently claiming maximum damages, the windfall from which is anticipated to be reinvested into the company. Despite these claims, some investors remained doubtful that Chin could actually achieve these sales and profit targets within the given time frame. However, after a guided tour of Lasco’s factory and warehouse facilities in White Marl, St Catherine on October 9, 2014, individuals left with a renewed sense of confidence in Chin’s vision and the direction he outlined for the group of companies.

A tour conducted by Chin himself, a man literally bursting at the seams with enthusiasm and pride in the company he built from scratch, led various individuals from the securities industry through Lasco’s entire manufacturing and distribution operations. From the Liquid and Dry Blend Plants to the docking area where the final product is loaded onto trucks and delivered to store shelves, Chin and the respective departmental managers shared details of the companies’ operations as well as how the US$30 million expansion impacted each area. Although Chin lamented the fact that the factory took longer to be completed than he expected, he was quick to point out that, based on the highly efficient layout of the factory, additional machinery and equipment could be installed in the space available with ease, boosting output even more.

Lasco’s management expertly guided visitors through the various operational processes, from the water purification process to the bottle moulding to the powder production process, after which individuals obtained a much better sense of the logistics of Chin’s initially ‘far-fetched’ vision. Doubling output within three years seemed entirely possible by the time the group of visitors reached the boardroom to discuss the company’s past performance and future projections.

In order to put Chin’s ambition into proper perspective, one must note that in the financial year ended March 31, 2014, Lasco Distributors (LASD), Lasco Manufacturing (LASM), and Lasco Financial Services (LASF) reported revenues of $9.5 billion, $4.0 billion and $628 million respectively. Over the same period, LASD, LASM and LASF also earned net profits of $587 million, $584 million and $177 million respectively. Ultimately, Chin is suggesting that, by March 31, 2017, LASD, LASM and LASF will be reporting net profit attributable to shareholders of $1.2 billion, $1.2 billion and $353 million respectively. Therefore, if we are to hold him to his word, what this means for investors and prospective investors is that if you were to buy the affiliated companies’ shares at the current market prices or lower, then in three years’ time, you would potentially be able to benefit from price appreciation of up to 100 per cent or more, depending on prevailing market conditions at that time. Furthermore, shareholders would also benefit from any dividends paid over the period.

While the tour of Lasco’s White Marl facilities was certainly helpful in dispelling concerns about Lasco’s capacity to generate and store the required output, it truly remains to be seen whether or not the affiliated companies can actually attract the demand necessary to double its sales. Chin has put his own credibility on the line, as well as that of his company, in striving to achieve such ambitious targets. Therefore, Lasco’s performance over the next few years will be under the microscope more so than usual, as investors eagerly watch to see whether or not he will be able to achieve such a feat. Notwithstanding the above, Lasco, which prides itself on being a company that delivers the best value for the consumer dollar, is yet another Jamaican company that investors can confidently partner with going forward to their mutual benefit.

We can expect Lasco to continue to reflect growth in its revenues and profits, given the companies’ expanded product offerings, increased exports, and more aggressive marketing within the context of an improving economic background.

Leon Franscique is a research analyst at Mayberry Investments Limited.