LASCO DISTRIBUTORS LIMITED
UNAUDITED 2nd QUARTER FINANCIAL REPORT
FOR PERIOD ENDED SEPTEMBER 30 2014
1
MANAGING DIRECTOR’S REPORT
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF FINANCIAL POSITION
STATEMENT OF CASHFLOWS
STATEMENT OF SHAREHOLDERS EQUITY
NOTES TO THE FINANCIAL STATEMENT
2
REPORT TO THE SHAREHOLDERS
The Board of Directors present second quarter unaudited financial results ending
September 30, 2014 for LASCO Distributors Limited.
The three month period ending September 30, 2014 showed an increase in revenues of
16.6%, operational expenses to sales showed was 13.9% a reduction compared to 14.1%
the previous period. Net profit was $112.5M a reduction of 18.9% compared to the
same period last year.
For the six month period ending September 30, 2014 revenues for the company
increased to $5.10B an increase of 10.0% and total comprehensive income was $202.9M,
a reduction of 33% compared to corresponding period last year.
Gross Profit margin was 17.9% compared to 19.9% of the comparative period last year.
In an environment where there is devaluation in the local currency and lower consumer
spending power, the company continues to deploy robust marketing and promotional
activities to drive demand.
Operating expenses increased by 17.2% to $738.0M compared to the same period last
year. This was due to the strengthening of the field force and marketing activities for
new product launches.
In a challenging business environment the company continues to be aggressive in
building market share for its core products and at the same time expanding the
portfolio with the launch of several new products within the period. This direction
required the implementation of measures to manage costs but at the same time
investing in key marketing activities to strengthen market position and increase brand
awareness. The company continues to be aggressive in its efforts to bring new products
to market and remains optimistic in the pipeline of our core product range and
principal brand representation.
In August 2014 LDL launched in trade the LASCO iCool Water, the first bottled
beverage from the new LASCO Manufacturing Ltd. Plant. The attractively packaged,
bottled water features an environmentally friendly, low density plastic bottle, with a
sleek and curved design. The brand, under the tagline ‘iCool fi Life’, is positioned as
trendy, new, refreshing and economical to consumers. Launch activities included
exclusive water sponsorship at Dover Raceway, as well as road blitzes at Caymanas
1
Crossing, Half Way Tree and Downtown Kingston. At the end of September 2014, trade
sales commenced for other iCool products – juices, cran waters and a value packaged 6L
water bottle.
At the end of the second quarter ending September 30th, 2014 Total Assets grew by
17.4% to $3.93B compared to $3.35B in the corresponding period last year. Property,
plant and equipment grew by 47.8% to $310.8M, this is primarily due to operational and
infrastructure improvements. For current assets, Inventories increased by $312.2M to
$1.31B, this is mainly due additional inventory from new business agreements. Short
Term Deposits increased by $320.6M to $659.5M and Cash and Bank Balances decreased
to $191.3M from $530.2M. Trade and Other Receivables was $1.74B an increase of
$274.1M over the prior year (September 2013). There was also a related increase in
Trade and Other Payables, an increase of $113.3M ending at $1.60B.
In August 2014, eight female students were awarded scholarships totaling $500,000
towards their secondary education, courtesy of the Curves Brand of feminine hygiene
products. The Curves GSAT Scholarship was established to help empower young
women across the island by directly aiding their educational pursuits. The top
performing female students were selected from each of the Ministry of Education’s
(MoE) six regions, in addition to one student each from the schools of the LASCO/ MoE
Principal of the Year, Windward Road Primary & Junior High School and the
LASCO/MoE Teacher of the Year, John Rollins Success Primary School in St. James.
LASCO Distributors sponsored Social Development Commission National Community
2014 T/20 cricket competition, which came to a dramatic finish, when Race Course
defeated Old Harbour. Four hundred teams participated in the community cricket
competition, with over 15,000 spectators attending the preliminary, parish and national
matches, held between April and August 2014, across 11 parishes.
For the corporate programmes, in July 2014 at the Nurse of the Year Awards Kingston
Public Hospital’s Shashana Lawrence emerged LASCO/NAJ Nurse of the Year
2014/2015.
We wish to thank our directors, management and staff for their commitment and hard
work. We are also appreciative for the confidence and support of our consumers,
customers and shareholders.
Peter M. Chin
MANAGING DIRECTOR
2
Lasco Distributors Ltd.
Statement of Comprehensive Income
Six Months Ended September 30,2014
(Unaudited)
Note
(Unaudited)
(Unaudited)
3 months to
3 months to 6 months to
6 months to
September September 30
September September 30
30 2014
2013
30 2014
2013
$'000
2,711,111
(2,236,383)
Revenue
Cost of Sales
Gross Profit
Other Operating Income
(Unaudited)
$'000
2,324,508
(1,867,364)
$'000
5,096,238
(4,186,253)
$'000
4,634,269
(3,714,328)
474,728
15,462
457,144
9,654
909,985
33,494
919,941
16,750
(377,216)
(327,815)
(738,029)
(629,752)
Profit from Operations
Finance Cost
112,974
(433)
138,983
(293)
205,450
(2,589)
306,939
(4,064)
Profit before Taxation
112,541
138,690
202,861
302,875
3
Operating Expenses
Taxation
4
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Number of Stocks Units Issued
Earnings per Stock Unit During the Period
5
0
0
0
0
112,541
138,690
202,861
302,875
3,372,931
$0.03
3,366,431
$0.04
3,372,931
$0.06
3,366,431
$0.09
3
Statement of Cash Flows
Six Months ended September 30, 2014
(Unaudited)
Sept 30 2014
Sept 30 2013
$'000
$'000
202,861
302,875
(219,025)
375,256
(16,164)
678,131
(116,295)
(331,850)
18,657
10,703
SOURCES/(USES) OF CASH
Operating Activities
Profit for the Period
Items not affecting cash and changes in
non-cash working capital components
Cash used in / provided by Operating Activities
Cash used in Investing Activities
Cash provided by Financing Activities
Net (Decrease)/Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at the beginning of Period
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD
(113,802)
305,079
191,277
356,984
173,204
530,188
5
Statement of Changes in Stockholders' Equity
Six Months ended September 30,2014
(Unaudited)
2014
Share Capital
$'000
Capital Reserve
$'000
Retained Earnings
Balance at April 1, 2014
Share Option
Total Comprehensive Income for the Period
219,191
6,500
0
75,387
2,102,559
0
202,861
2,397,137
6,500
202,861
Balance at September 30, 2014
225,691
75,387
2,305,420
2,606,498
2013
Share Capital
$'000
Capital Reserve
$'000
Retained Earnings
$'000
Total
$'000
219,191
75,387
1,592,523
1,887,101
0
0
302,875
302,875
219,191
75,387
1,895,398
2,189,976
Balance at April 1, 2013
Total Comprehensive Income for the Period
Balance at September 30, 2013
$'000
Total
$'000
6
1.
Notes To The Financial Statements
Six Months Ending September 2014
BASIS OF PREPARATION
These financial statements have been prepared in accordance with and comply with
International Financial Reporting Standards (IFRS), and have been prepared under the
historical cost convention, as modified by the revaluation of certain fixed and financial
assets. They are also prepared in accordance with the provisions of the Jamaican
Companies Act.
The preparation of financial statements to conform to IFRS requires management to
make estimates and assumptions that affect the reported amounts of the assets and
liabilities, contingent assets and contingent liabilities at the end of the reporting
period and the revenue and expenses during the reporting period. Actual results could
differ from those estimates. The estimates are reviewed on an ongoing basis and any
adjustments that may be necessary would be reflected in the year in which actual
results are known.
The accounting policies followed in the preparation of the financials are consistent
with those used in the audited financial statements for the year ended 31 March 2014.
These financial statements are presented in Jamaican dollars unless otherwise
indicated.
2. IDENTIFICATION AND PRINCIPAL ACTIVITES:
(a) LASCO Distributors Limited is a limited liability company incorporated and
domiciled in Jamaica. The registered office of the company is 27 Red Hills Road,
Kingston 10.
(b) The principal activity of the company is the distribution of pharmaceutical and
consumable items.
(c) The company’s shares were listed on the Junior Market of the Jamaican Stock
Exchange on 12 October 2010.
LASCO DISTRIBUTORS LIMITED
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Notes To The Financial Statements
Six Months Ending September 2014
3. OTHER INCOME
Other Income represents commission earned from services which have been provided
and interest income.
4. TAXATION
Remission of income tax:
The company's shares were listed on the Junior Market of the Jamaica Stock Exchange,
effective 12 October 2010. Consequently, the company is entitled to a remission of
taxes for ten (10) years in the proportions set out below, provided the shares remain
listed for at least fifteen (15) years:
Years 1 to 5 100%
Years 6 to 10 50%
The financial statements have been prepared on the basis that the company will have
the full benefit of the tax remission.
5. EARNINGS PER STOCK UNIT
Basic earnings per stock unit is calculated by dividing the net profit attributable to
stock holders by the number of Ordinary Stock Units in issue during the period.
2014
$’000
2013
$’000
Net Profit attributable to Stockholders
202,861
302,875
Number of Ordinary Stocks in issue
3,372,931
3,366,431
Basic earnings per stock unit
$0.06
$0.09
LASCO DISTRIBUTORS LIMITED
Page 8
Notes To The Financial Statements
Six Months Ending September 2014
6. PROPERTY, PLANT AND EQUIPMENT – ( At Cost Less Depreciation )
2014
$’000
2013
$’000
310,807
210,354
The movement in Property, Plant and Equipment represents additions to Computers,
Fixtures and Fittings as a result of expansion purposes.
7. SHORT TERM INVESTMENT
Short-term Investment
2014
$’000
2013
$’000
659,511
338,943
This represents interest bearing amounts invested with financial institutions for a
period of no less than three (3) month but no greater than one (1) year.
8.
CASH AND BANK BALANCES
2014
$’000
Cash and Bank Balances
LASCO DISTRIBUTORS LIMITED
191,277
2013
$’000
530,188
Page 9
Notes To The Financial Statements
Six Months Ending September 2014
9. SHARE CAPITAL
2014
$’000
2013
$’000
225,691
219,191
Authorised 3,630,000,000 Ordinary Shares of no par value
Stated CapitalIssued and fully paid3,372,931,150 Ordinary Shares of no par value
At an Extraordinary General Meeting held on 26 June 2013, the Shareholders of LASCO
Distributors Limited approved a resolution allowing each share of no par value whether
issued or un-issued to be sub-divided into 10 shares. The Authorised and Issued shares
indicated above reflect the stock split approved by the shareholders.
Stock Options were exercised in the amount of 6,500,000 shares at a par value of
$1.00 per share in September 2014.
LASCO DISTRIBUTORS LIMITED
Page 10