Atlantic Hardware’s Annual Earnings “Sawed” by Higher Expenses

  • Following a delay in submission, which led to the JSE suspending its shares on July 1st, Atlantic Hardware (AHPC) has now released its audited financials for the year ending December 2025 (FY2025). Earnings fell 23.9% year-over-year to J$68.87Mn, as a sharp rise in operating expenses and higher depreciation charges eroded the benefit of double-digit revenue growth.
  • Revenues climbed 13.7% to J$1.82Bn, while its cost of sales rose at a slower pace of 11.2% to J$1.26Bn. Consequently, gross profits grew 19.6% to J$551.78Mn, while gross margins widened to 30.4% from 28.9%.
  • However, selling, general and administrative expenses far outpaced revenue growth, rising sharply (+59.2%) to J$340.17Mn. Consequently, operating profits fell 13.3% to J$229.49Mn, and operating margins narrowed from 16.6% to 12.6%. Depreciation and amortisation expenses rose more than three folds to J$59.72Mn, primarily driven by a sharp increase in depreciation from right-of-use assets (leased land and buildings), which jumped to J$46.32Mn from J$7.19Mn following lease modifications. This outweighed a J$27.80Mn gain on the sale of fixed assets and a 12.1% reduction in interest expense to J$126.90Mn. As a result, pre-tax profits were down 36.5% to J$74.91Mn.
  • However, AHPC bounced back in the first quarter of (Q1 2026). Profits tripled year-over-year to J$74.25Mn. Post-Hurricane Melissa demand and operational scaling meant revenues surged 49.5% to J$687.1Mn. The company also benefited from a 46.7% drop in finance costs following substantial debt repayments funded by its Junior Market IPO and the accompanying 100% tax break, which should last for the next 5 years.
  • Looking ahead, its new agro-distribution segment offers an opportunity for revenue diversification and demand for wholesale building materials should help to support the company’s performance. This pipeline is expected to be underpinned by the Government of Jamaica's multi-year post-Hurricane Melissa reconstruction and unspent disaster donations still in the early stages of deployment.
  • With its earnings now released, the JSE has resumed the trading of AHPC shares. AHPC’s stock price has increased by 1.3% since the start of the year to close at $1.52 on Monday, July 6, 2026. At this level, the stock trades at a price-to-earnings (P/E) ratio of 30.4x, which is above the Junior Market Distribution Sector average of 24.1x.

(Sources: Atlantic Hardware & Plumbing Financial Statements & NCBCM Research)