Feb 2012 Financial News

Lascelles Q1 profit dips

Feb 29, 2012

Spirits conglomerate Lascelles deMercado and Company has blamed last December's election and a weak economy for a 12 per cent drop in net profit in its first quarter.

Lascelles, owner of the famous Wray & Nephew and Appleton rums, said the local and international economic environment continue to show weak or no growth.

"Consumer demand, therefore, continues to be weak as evidenced by the reduction in total sales volumes. In addition, the general election held in December 2011 had the effect of depressing sales," said a joint statement from chairman Gerald Yetming and managing director Fraser Thornton to Wednesday Business.

Lascelles made J$722 million in the December quarter off depressed revenues of J$6.4 billion.

Revenues were off by 11 per cent relative to the previous year.

Despite the soft first quarter, the conglomerate remained upbeat about prospects for the ensuing quarters of its financial year. Sugar revenues - substantially earned in the second quarter - are projected to "increase significantly" due to a substantial increase in price over the prior year, the company said.

Additionally, it expects normalised sales from its Subaru and Ford models in the automotive division.

During the review quarter, however four of its five business segments posted less profit.

General insurance segment doubled profit year on year to $371 million, but liquors, rum, wines and sugar divisions fell 16 per cent to J$526 million; and general merchandise declined 64 per cent to J$28 million. The investment segment made a loss of J$14 million, compared with profit of J$98.7 million, while transportation also made a loss of J$28 million, compared with J$16 million of profit in the December 2010 quarter.

Lascelles' net cash position was relatively unchanged in the quarter at J$6.7 billion while its capital base dipped less than four per cent to J$28.5 billion.

The Jamaican conglomerate is owned 87 per cent by the Trinidadian government through its takeover of the failed CL Financial Group in 2009.


Source;
business@gleanerjm.com
Wednesday February 29, 2012

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