The Lasco Companies: Where do we Go?
Mr. Market wants that Succession Plan.
It is the numbers, it is the fundamentals, the strategy, but also the “people” and in the people comes the succession plan… We get this question a lot at ItsMoneyMark, “What is Lasco companies plan long-term or after the great, the legend Hon. Lascelles Chin O.J., C.D.?” We refer to Lasco here for simplicity as Lasco Group, although factually it is three (3) different companies, listed on the JSE – Jamaica Stock Exchange, Lasco Manufacturing, Lasco Distributors, and Lasco Financial.
- Even though each has a separate Managing Director and Board of Directors, the perception is, they seem to need more marketing, branding, product development again?
- Although, each has a Managing Director, we seem to not be feeling Lasco as we used to, or is it that they are just a more mature company now?
- Even if a more mature company, is that acceptable or should they seek to energize and grow again?
Overall, it is clear to us at ItsMoneyMark, that Mr. Market would want to see more disclosure, information on this topic by Lasco.
Lasco Manufacturing and Lasco Distributors are performing fairly, but not at historical growth rates, shareholders became accustomed to, while Lasco Financial, seems to need a clearer strategic rehaul or new directive.
Similar to shareholders in Desnoes & Geddes, Red Stripe, in the event that Lasco Companies do not re-energize, there is immense value there, and when companies to not succession plan, or re-develop, the value once maintained, will be seen or can be realized if there is a buy-out or takeover over the medium to long-term.
SEPROD TO THE HOUSE!
Seprod Limited (JSE: SEP), continues to re-iterate our point at ItsMoneyMark and we love that, during these inflationary times, stick with the companies’ doing things, in other words, executing Mergers & Acquisitions (M&A), and the good old organic growth as well.
We mentioned in a previous publication, Bryden group, that deal is going to be big for Seprod. Well, so said, so done. As SEP has messaged in their quarterly numbers, and stated, with only one (1) month of the quarter reflecting Bryden Group, talk about an uplift already. We are already looking forward to seeing a full quarter of the impact of Bryden Group in SEP’s numbers for the upcoming 3rd quarter…
Seprod’s 2nd quarter, for the period ended June 30, 2022, earnings got back to rolling again, jumping 33%, with net profit improving to J$ 984 million, versus J$ 661 million, year over year. Earnings per share for the quarter alone, registered J$ 1.20/ share. Revenue seeing that uptick, skyrocketed to J$ 15.9 billion from J$ 10.2 billion year over year, plus 56%.
There are a magnificent amount of “foodie” plays on the JSE – Jamaica Stock Exchange, but with what Seprod keeps doing, and Wisynco announced earlier this week with their succession planning, a clearer path is being created for the “best of breed” market players for the coming years…
Market Moves:
- Future Energy Source Company Limited (JSE: FESCO) Board of Directors are scheduled to meet today, August 12, 2022, to consider a final dividend for the year ended March 31, 2022. We expect that FESCO will declare a dividend, we cannot think of a reason they would not as they have the corporate note/ debt in place for their expansion plans, and their numbers have been good.
Based on the timing of the board meeting, expect the quarterly numbers, “hotly expected” by FESCO to be released today as well to the JSE – Jamaica Stock Exchange, or by the latest, Monday, August 15, 2022. The share price has come off a bit from J$ 5.90 – J$ 6.00/ share and is trading in the lower J$ 5 price range as of late… Seems the market is not expecting much from FESCO, but they could continue to surprise to the upside.
- Stanley Motta Limited (JSE: SML), continues delivering dividends for shareholders and delivered improved quarterly results. SML declared a dividend of J$ 6.6 cents per share and it will be paid on September 2, 2022.
SML’s 2nd quarter earnings for the period ended June 30, 2022, were better than expected. SML over the years, still a young company, has been known as an “income play,” so seeing some above average growth for the period is a welcome surprise for minority shareholders. The share price has been trading in one of the tighter 52-week bands on the JSE, J$ 4.55 – J$ 6.00. This is normal or expected for “income play” type of securities, even if ordinary shares.
SML delivered approximately 4% growth in top line in Q2 2022, but it was the well managed admin expenses, lower, that delivered the uptick in earnings. Net profit closed the quarter at J$ 69.6 million versus J$ 56.1 million, with earnings per share (“EPS”) ringing in the register at J$ 9 cents versus J$ 7 cents year over year.
- FosRich Company Limited (JSE: FOSRICH) has delivered more than 15x returns post-IPO and based on its all-time high or peak 20x + for its original investors in the FOSRICH IPO – Initial Public Offering. We keep saying it at ItsMoneyMark, stick with companies doing things, executing, and making moves. These types of companies will deliver the returns over the long-term that you expect.
FOSRICH just delivered another “on fire” quarter, and this has become a consistent theme not just year over year but on a running quarter basis, which makes it even more impressive. Something that jumped out to as well was, FOSRICH’s announcement in the MD&A – management, discussion & analysis that a new subsidiary, owned 100% by FosRich, incorporated on April 12, 2022, got going in the quarter. It is called, O’N’S Mini Mart & Electrical Supplies Limited and “hint, hint” from the name, we guess, retail biz… Bottom line, FOSRICH, making another “big money move.”
By the numbers, FOSRICH earnings crushed the street, increasing by 87% in the 2nd quarter, reporting J$ 28 cents per share versus J$ 15 cents per share. On a net profit basis, J$ 139 million versus J$ 76 million, year over year. Just as impressive, FOSRICH grew top line, revenues, to J$ 898.7 billion, from J$ 543.7 million, a whopping increase of 65%. It seems just a matter of time, whereby FOSRICH will be delivering revenues of J$ 1 billion a quarter on a continuous basis.
- Sagicor Real Estate X Fund Limited (JSE: XFUND) delivered a disappointing quarter, for its 2nd quarter, June 30, 2022. The company has been going through the motions for some time now, and overall, at ItsMoneyMark, we get the sense that, this company, and Sagicor Select Funds, are either on auto pilot or as mentioned going through the motions. The outlook is difficult to ascertain as an investor or if you are a minority shareholder.
By the numbers, which support the recent change of the Chair becoming an independent chair, we assume. Revenues for the 2nd quarter, year over year, almost identical, coming in at J$ 1.634 billion, J$ 400k lower, than the previous year. Net loss was the number to stomach, at J$ 71.4 million, versus profit in the previous year of J$ 500.1 million. The difference maker, “Net capital (losses)/ gains on financial assets,” had a negative variance, large, hitting the financials with a loss of J$ 273 million in the current quarter, versus the previous year of a gain of J$ 472 million.
- In U.S. Markets, the continued “watch word” continues to be inflation. Its hard to go a day without seeing it, whether from regulators, well-known Chief Investment Officers, CEOs, and so on.
Its not bad to take some cash off the table in these times, as until stability returns economic wise, it is the (a) inflation & (b) leverage that will hurt you. Even though Elon Musk could be doing it, we do not know factually if this is for his Twitter deal, or something else (he mentioned he would start his own social media platform X.com if required). As notably per recent public SEC filings, Muskie sold more Tesla shares.
Muskie ending up selling, in early August 2022, 7.92 million Tesla shares, yielding approximately, US$ 6.88 billion. Whether for Twitter, or for X.com or something else, interesting times ahead. What we do know is betting against Musk has not been a smart idea for anyone to date…
ITSMONEYMARK 
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