Date: November 2, 2018
Lasco Financial Services (LASF) recorded for the six months ended September 30, 2018, a total of $1.08 billion in Trading Income; this represented a growth of 59% relative to the $681.28 million recorded in the comparable period in 2017. For the quarter, Trading Income closed at $558.14 million (2017: $378.60 million), a growth of 47% year over year. The Company highlighted that, “the growth is being driven by a general increase in business over the previous year.” Other Income for the six months period amounted to $57.02 million compared to $33.93 million in 2017. Consequently, this resulted in an overall income of $1.14 billion for the six months, a growth of 60% compared to $715.22 million in 2017.
Operating Expenses for the period closed at $837.27 million, which is 65% more than the $506.41 million recorded in September 2017. Selling and Promotional Expenses increased by 70% amounting to $432.77 million relative to $254.24 million in 2017, while Administrative Expenses rose 60% to close at $404.50 million (2017: $252.17 million). Management indicated that, “this is mainly due to the expenses from the Subsidiary which would not have been reflected in the previous year. Subsequent to the acquisition in December 2017 and ensuing merger of the loans business of LFSL into the subsidiary, there has been additions of staff and investments in technology and infrastructure to support the growing customer base and workforce. These investments are key to the development of the business to support the planned growth and market presence.”
As a result, Profit from Operations for the period grew by 46% to total $303.93 million relative to $208.80 million that was recorded in the prior period in 2017. While for the second quarter, Profit from Operations rose by 5% closing at $131.67 million (2017: $125.50 million).
Finance Cost amounted to $81.13 million for the period (2017: $4.29 million), a gross increase of 1792%. The company will be contacted for more information regarding this drastic increase. As for the second quarter, Finance Cost totaled $40.43 million versus $2.14 million in the prior comparative quarter.
Profit before taxes amounted to $222.80 million in 2018 relative to $204.52 million in 2017, a 9% year over year increase.
After taxation of $61.65 million (2017: $37.77 million), Net Profit for the six months ended September 31, 2018 amounted to $161.15 million, declining slightly by 3% from the prior period’s Net Profit of $166.74 million. Also, for the second quarter, LASF experienced a 39% decline in Net Profit closing at $60.63 million (2017: $99.87 million).
Earnings per Share (EPS) for the period amounted to $0.127 (2017: $0.132), while for the quarter, the EPS amounted to $0.05 (2017: $0.08). the trailing earnings per share amounted to $0.20. The number of shares used in the calculation was 1,264,694,391. The twelve months trailing EPS is $0.20. The stock price as at November 01, 2018 closed at $5.44.
Lasco Financial Services (LASF) commented that, “The business continues to grow in spite of the challenges within the markets in which it serves. There is a general downturn in remittances; cambio spreads, though currently stable, has been the subject of occasional shocks which can have an impact on profits. The loans business though faced with aggressive competitive activity from other microfinance companies and commercial banks, is still able to carve out a market share to the benefit of its customers.
Balance Sheet Highlights:
As at September 30, 2018, the Company’s assets totaled $3.63 billion, $1.87 billion more than its value a year ago . This increase in ‘Total Assets’ was largely driven by increases in ‘Receivables and ‘Intangible Assets’ which closed at $1.95 billion (2017: $1.01 billion) and $839.80 million (2017: $18.93 million), respectively. However, ‘Short-term Deposits’ declined by 72% from $301.34 million to total $85.17 million, despite the growing loans portfolio.
Total Stockholders’ equity as at September 30, 2018 closed at $1.53 billion an increase of 20% compared to the $1.27 billion reported in 2017. This resulted in a book value per share of $1.21 (2017: $1.01).
Disclaimer: Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.