Despite the economic fallout in the tourism sector and general commuting segments of the population, Lasco Distributors Limited (LASD) experienced a four per cent rise in revenue to $20.29 billion with net profit increasing by 25 per cent to $909.48 million for the 2021 financial year (FY) ending March 31.

The consumer division lead growth as revenue improved by six per cent to $16.56 billion while the pharmaceutical division saw a two per cent reduction to $3.72 billion. This was the first FY where LASD’s revenue base surpassed $20 billion. However, the six per cent increase in cost of sales to $16.64 billion resulted in a three per cent reduction in gross profit to $3.65 billion. Even with a 13 per cent improvement in other income, total income for LASD still performed three per cent lower at $3.79 billion.

“ . This means bringing new categories on board as well as alliance and partnerships. A portion of this [cost of sales] is due to higher input costs, logistics and otherwise, due to cost increases the full extent of which increase were not passed on to the consumer. Additionally, there was an underperformance of categories aimed at out of home consumption, including schools, as a result of the COVID-19 containment measures,” stated deputy chairman of LASD James Rawle on the focus for LASD in 2021 and the effects of COVID-19 on business costs. Rawle was the acting managing director (MD) for nearly two years following the departure of Peter Mark Chin before the appointment of former Unilver Caribbean MD John De Silva on March 1.

Total expenses for LASD dropped by 13 per cent to $2.67 billion as selling and promotional expenses fell by 22 per cent to $548.81 million while administrative expenses declined by 10 per cent to $2.13 billion. These cost reductions saw operating profit growing by 34 per cent to a normalised record of $1.12 billion.

As finance costs lowered to $4.84 million on the company’s remaining $13.33-million loan, profit before taxation rose by 36 per cent to $1.12 billion. However, due to the company’s tax break remission ending on October 11, its income tax spiked by 123 per cent to $206.53 million. This left LASD with its highest ever normalised net profit of $909.48 million which is just shy of the $1 billion earned in the 2018 FY when the company was paid for the Pfizer case. LASD’s consumer division had a 32 per cent rise in profit to $595.95 million while its pharmaceutical division saw profit rise by 14 per cent to $313.53 million. The appeal still remains subject to the Court of Appeal’s final decision which has been reserved since February 2020. Earnings per share was $0.26 versus $0.21 in the prior year.

LASD’s US$6-million expansion for its White Marl and Red Hills locations should commence shortly following the delays experienced from the pandemic. LASD plans to add 62,000 square foot to its White Marl space and 20,000 sq ft to its pharmaceutical division. The company’s total assets increased by 18 per cent to $10.81 billion while total liabilities rose by 25 per cent to $4.34 billion. Shareholders equity closed the period 13 per cent higher at $6.47 billion.

Even with all the fortunes that the Lasco companies experienced during the year, Chairman Lascelles Chin cautioned both shareholders and Jamaica to be wary of the environment as the full effects of the pandemic become more apparent.

“In the prior years, I wouldn’t be so happy with what’s been happening, but in the last three years especially for manufacturing and distributors, we have been growing at an average of 30 per cent in the time of COVID-19. We still have to be careful with the future as the pandemic is not yet over. I’m confident that the shareholders will be very happy with the results. We’re being careful, frugal and very efficient,“ Chin said.