LASF’s Year-to-Date Performance Still Trailing, Despite Strong Q3 Performance

  • Despite recording an 18.6% improvement in its bottom line over the quarter, earnings s declined by more than 50.0% in the nine months to December 2023.
  • Revenues over the quarter declined by 2.5% yoy. This was due to the continued decline in revenues from all core services, and contribution from the new service was insufficient to offset the reductions.
  • Consolidated expenses for the quarter totaled $476.02Mn compared with $482.86Mn, a decrease of 1.4%. The improvement in expenses was underpinned by lower Administrative expenses, which decreased by 11.8%, a result of the efforts to control expenses. However, the results were tempered by higher selling and Promotions, which rose by 20.5%, reflecting increased support for the services over the comparable three-month period.
  • Although certain measures were implemented in the first quarter to control administrative costs for the financial year, there has been a general increase in marketing activity to promote all of the company’s services to improve the pace of growth in sales.
  • During the quarter, the company launched its LASCO MoneyGram Direct “Size Matters” campaign. This MoneyGram service will allow the sender to opt for cash pick up at a LASCO agent, for which the receiver is paid at a higher rate of exchange. This campaign will be continued into the coming periods and will be ramped up to achieve certain key objectives.
  • However, a combination of higher operating expenses and weak revenues resulted in the sharp falloff in the nine months earnings. Operating expenses were up 7.6% due to higher administrative costs and selling and promotion expenses. This was exacerbated by the 2.9% reduction in revenues over the period.
  • LASF’s stock price has increased by 6.3% since the start of the calendar year. The stock closed Monday’s trading session at $2.04 and currently trades at a P/E of 21.9x which is above the Junior Market Financial Sector Average of 18.3x.

(Sources: JSE & NCBCM)