By McPherse Thompson, Assistant Financial News EditorTHE HARDWARE & Lumber Group has recorded net profits up almost 300 per cent for the year to the end of December 2002, spurred by improved sales performance of more than $1.2 billion, especially attributable to its retail division.
The group's net profit position improved from $16.3 million to $48.1 million, a move the directors attributed to sales growth which continued above inflation, as well as improvements in gross profit margins.
In its audited results released last week, Richard Byles, the group's chairman, and Anthony Holness, managing director, said however, that the Wholesale Hardware and Agriculture divisions recorded flat performances in sales and profits due to adverse market conditions and the inclement weather that affected the demand for agricultural inputs. Office Services Division, comprising office maintenance and scaffolding rental, recorded an increase in performance.
Pan Caribbean Financial Services, formerly Trafalgar Development Bank (TDB), which is another member company of the Pan-Jamaican Group, also reported improved performance for the year to December 2002, with earnings per share increasing to 85 cents from 38 cents the previous year.
Mr. Byles, who is also chairman of that company, and Donovan Perkins, the president and chief executive officer, said net income was essentially flat when considered that the 2002 results were being compared with the 15 months to December 2001. In that 15-month period, TDB reported interest income of $366.1 million, while in the 12 months to December 2002, it came in at $265.4 million. The bank changed its name from Trafalgar Development Bank to Pan Caribbean Financial Services in December 2002.
Pan Caribbean Financial, however, posted growth of 27 per cent in fees and other income, moving to just under $279.2 million from $220.5 million in 2001. The directors said translation gains of $58.3 million and higher volumes in securities activities at the merchant bank accounted for the improvement.
Off-balance sheet earning assets increased by $2 billion to $11.1 billion at year end, while shareholders' equity stood at $991 million.
Pan-Jamaican Investment Trust, yet another member company, recorded after tax profits of $425.9 million, a 61 per cent increase over the $264.9 million the previous year. "Good contributions from our insurance and banking interests, coupled with a strong profit recovery by our trading division, and a solid performance by our property assets, all helped to drive the impressive profit increase," said Maurice Facey, the company's chairman and Mr. Byles, the president and chief executive officer.
Return on equity was up four per cent to 20 per cent, while shareholders' equity stood at $2.3 billion, compared with $2.1 billion the previous year.
FirstLife Insurance Company, the group's insurance arm, also saw after tax profit for the year increasing by 37 per cent to $527.3 million. Mr. Byles, that company's chairman, said the improved position was "driven by good results in the insurance and banking operations, supported by a solid performance by our commercial properties."
The insurance company's results include all the one time costs associated with a joint back-office operation with Life of Jamaica, but none of the cost savings as the physical merger was only effected on January 2, this year, Mr. Byles said.
Directors of the four companies in the Pan-Jam group have recommended final dividend payments for the year 2002: 7.5 cents per share to shareholders of the Hardware & Lumber Group, $0.095 for Pan Caribbean Financial Services, $0.215 for Pan-Jamaican Investment Trust, and $0.168 per share for FirstLife Insurance Company.
