LASCO Financial Services Limited (LASF) for the first quarter ended June 30, 2023, reported a negligible decline in trading income totalling $539.18 million compared to $539.99 million in the corresponding three months last year.
Other Income amounted to $35.18 million (2022: $24.50 million), this represents an increase of 44% year over year.
Administrative & other expenses rose by 22% to close at $327.84 million (2022: $268.03 million), while Selling and promotional costs increased by 10% from $162.92 million in 2022 to $178.68 million for the three months. As a result, Operating Expenses for the first quarter amounted to $506.52 million, an 18% increase relative to $430.96 million reported in 2022. LASF noted, “Our first Quarter was a turning point for the business as we implemented several organizational changes to drive more efficiencies. This resulted in the redundancies of some fifteen positions between both companies (LASCO Financial and LASCO Microfinance) as we make efforts to consolidate resources and maximize value. The expenses associated with these separations are reflected in this quarter.”
Profit from Operations for the three months amounted to $67.83 million, a 49% decrease relative to the $133.53 million reported in 2022. Finance Costs totalled $24.76 million, a 7% decrease from the corresponding period last year (2022: $26.77 million).
Profit Before Taxation for the first quarter ended June 30, 2023, amounted to $43.07 million, a 60% decline relative to $106.76 million reported in 2022.
Taxation for the three months had a marginal decrease to reach $24.25 million (2022: $23.98 million). Net Profit for the three months amounted to $18.82 million, a 77% fall from the $82.78 million reported in 2022.
Consequently, Earnings Per Share for the three months amounted to $0.015 (2022: EPS: $0.065). The twelve-month trailing EPS was $0.12, and the number of shares used in these calculations was 1,280,227,726. Notably, LASF last traded on July 31, 2023, at a price of $2.30 with a corresponding P/E ratio of 19.63x.
LASF highlighted, “Several foundational activities were embarked upon in the first quarter significantly increasing expenses, including increased advertising to drive awareness of our key services with the expectation of growth in the next three quarters and the reduction in permanent staff positions arising from reorganization to drive efficiencies and control future costs. With lowered fixed costs, we anticipate stronger results for the rest of year.”
Balance Sheet Highlights
The company’s assets totalled $3.82 billion (2022: $4.33 billion). The company noted, “The key contributor to this decline is the reduction in our cash holdings. LFSL has strong cash generating capacity which we leveraged to pay down our long-term loan with JMMB Bank by $439 million or 42%. This was a significant move for us to strengthen our financial position.”
Shareholder’s equity was $2.13 billion (2022: $2.04 billion), representing a book value per share of $1.66 (2022: $1.60).
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.