Posts 352% jump in pre-tax profit of $145 million

Lumber Depot Limited is profiting from the growth in the local construction sector ending its financial year last April with pre-tax profit climbing by 352 per cednt to $145.02 million.

The pre-tax profit for the comparable period in 2020 was $32.05 million. Taxation charge for the year was $25,254, resulting in a net profit of $145 million coming from $22.18 million for the year for the year ended April 30, 2020.

For the April 2021 quarter, net profit was $64.15 million relative to a net loss of $15.30 million booked the corresponding quarter last year. Operating profit for the year amounted to $144.36 million, up 303 per cent relative to the $35.84 million reported in 2020.

For the April 2021 quarter, operating profit totalled $54.68 million compared to an operating loss of $12.46 million in 2020. Revenue growth for the year was healthy ending the financial year at $1.43 billion, an increase of 55 per cent year over year compared to the 2020 out-turn of $921.45 million.

Revenue for the fourth quarter totalled $410.39 million coming from $293.05 million in 2020.

Management’s account for the positive financials

The management is boasting about the company’s positive financial performance declaring that, “Lumber Depot is clearly generating returns from the growth in Jamaica’s construction sector and to some extent from its improved tax status arising from its listing on the Junior Market of the JSE (Jamaica Stock Exchange). Over the medium term, we expect Jamaica’s construction and home improvement industry to continue to benefit from increased liquidity in the financial services sector as well as improved overall competitiveness of the Jamaican economy”.

The managed highlighted the reasons for a successful year positing that, “a major area of focus for us was to maintain consistent inventory levels in all of the key hardware supplies including lumber, steel and cement products regardless of the factors affecting production and transportation of these items. We have proactively developed relationships with key suppliers of construction inputs both in Jamaica and overseas and sought to buy strategically in order to contain the impact of rapidly increasing global commodity prices and transport costs”.

Cost of sales for the period amounted to $1.14 billion. Consequently, gross profit for the period closed at $293.45 million. Administrative and other expenses went up by 42 per cent to $154.22 million, compared to the $108.29 million reported 12 months prior.

Impairment gains on trade receivables amounted to $3.17 million relative to the Impairment loss of $20.28 million reported for the nine months ended April 2020. Net finance costs totalled $2.57 million relative to the $6.11 million reported for the nine months ended April 2020.

As at April 30, 2021, Lumber Depot reported total assets of $526.63 million (2020: $374.01 million). The main contributors were ‘Cash and Cash Equivalents’ and ‘Inventories’ which closed at $142.66 million (2020: $29.08 million) and $131.60 million (2020: $104.69 million), respectively.

Shareholders’ Equity as at April 30, 2021 was $323.11 million (2020: $192.24 million). This resulted in a book value per share of $0.46 relative to the $0.27 reported in the corresponding period last year.

The management pointed out that, “during the course of the year, Lumber Depot, grew shareholders equity by 68 per cent and quintupled its cash position”.