Increased Costs Weigh Heavily on LASF’s Q1 Performance  

  • LASCO Financial Services Limited (LASF) recorded a net profit of $18.82Mn for the first quarter ended June 30, 2023, representing a 77.3% year-over-year decline in profitability.
  • Consolidated income for the period amounted to $574.35Mn, representing a slight improvement of 1.7% when compared to the corresponding quarter of the previous year. This growth was fueled by trading gains, new services and fees.
  • Consolidated expenses for the quarter reached $506.53Mn, up $75.60Mn from the previous period. This increase was due to a $15.76Mn (+9.7%) rise in Selling and Promotional expenses, supporting new services. Additionally, administrative costs surged by 22.3%, or $59.81Mn due to the deployment of new services, operational cost inflations, and redundancy packages.
  • LASF’s stock price has decreased by 25.4% since the start of the calendar year. The stock closed Wednesday’s trading session at $2.15 and currently trades at a P/E of 18.3x which is above the Junior Market Financial Sector Average of 17.0x.
  • Several foundational activities were embarked upon in the first quarter, significantly increasing expenses. Notable among them were increased advertising, aimed at promoting key services in anticipation of growth in subsequent quarters. Additionally, a reduction in permanent staff positions due to reorganization aims to enhance efficiency and control future expenditures. As a result of these restructuring efforts and reduced fixed costs, an improvement in results is anticipated for the remainder of the financial year.

(Source: JSE)