Q3 Earnings Decline Drags Limners and Bards’ Nine-Month Performance

  • Weighed down by a falloff in earnings and higher operating expenses, Marketing & Advertising Agency, The Limners and Bards Limited (LAB) posted lower earnings attributable to shareholders for the three months ended July 31, 2025 (Q3 2025),
  • Total revenues fell 13.0% year over year (YoY) to J$267.14Mn. The lower revenue outturn was accompanied by an 18.6% YoY decline in direct costs to J$165.38Mn. With direct costs contracting at a faster pace than revenues, gross profit margin improved to 38.1% in Q3 2025, up 4.2 percentage points from 33.9% in Q3 2024.
  • However, total operating expenses rose by 10.5% during the quarter, driven by higher Administrative (+9.4%) and Selling & Distribution (+289.7%) costs. This pressured profitability, with operating profit falling 25.3% YoY to J$22.33Mn. Ultimately, net profit declined 36.5% to J$21.69 million, down from J$34.13 million in the prior-year quarter.
  • The Q3 earnings performance, along with weak earnings from the start of the financial year, contributed to the company’s nine-month results (9M 2025), plummeting 49.4% to J$42.3 million year over year. Management attributed the weaker showing primarily to elevated operating costs tied to strategic hires in business development, content creation, and client service, as well as facility upgrades. These investments, while dampening short-term earnings, are expected to bolster long-term growth potential.
  • Looking ahead, management is aiming to stabilise short-term performance while laying the groundwork for sustainable growth. Its strategy is focused on diversifying beyond traditional advertising into digital-first services, influencer and user-generated content solutions, and content ownership through its “Five in 25” film slate. The company also noted growing traction in overseas markets, which now contribute 9% of total revenues. Meanwhile, it is seeking to contain operating costs through smarter resourcing, while protecting growth-focused investments, and embedding technology and flexible talent models to enhance efficiency, speed turnaround times, and strengthen competitiveness.
  • LAB’s stock price has declined by 29.6% year-to-date, closing at $0.98 as of Tuesday. At this price, the stock is trading at a P/E ratio of 25.8x, which is above the Junior Market Sector average of 22.1x.

(Sources: The LAB Ltd. Unaudited Earnings Release & NCBCM Research)