Lasco’s Manufacturing And Distribution Segment Sees Solid Growth In FY 2021

• Lasco Manufacturing and Lasco Distribution Limited have both seen growth in their respective bottom lines. The manufacturing segment reported a 23.8% increase in net profit to $1.71Bn for its FY ending March 2022, while the distribution segment saw an 11.8% growth in net profit to $1.02Bn. 
• Both companies’ financial performance was supported by revenue growth. Revenue from the Manufacturing and Distribution segments grew by 15.4% and 15.0%, respectively, supported by an increase in business activity for both companies. 
• However, when their efficiency levels were assessed, both companies saw a slight decline in their respective gross margins. There was a 1.2p.p reduction in the manufacturing arm’s margin, while the Distribution arm saw a 1.4p.p reduction. This was caused by higher direct costs owing to increased costs for logistics services and materials. 
• During their FY 2022, we expect that both companies will benefit from greater resumption of economic activity supported by the withdrawal of the COVID-related restrictions under the Disaster Risk Management Act. This will however be tempered by rising commodity prices, which will negatively impact margins. 
• Lasco Manufacturing's stock price has increased by 9.7% since the start of the calendar year. The stock closed Tuesday’s trading session at $5.21 and currently trades at a P/E of 12.6x earnings which is below the Junior Market Manufacturing Sector Average of 19.5x. 
• Meanwhile, Lasco Distribution's stock price has decreased by 2.1% since the start of the calendar year. The stock closed Tuesday’s trading session at $3.32 and currently trades at a P/E of 11.5x earnings which is below the Junior Market Distribution Sector Average 23.2x.

(Sources: Company Financials and NCBCM Research)