Susan Gordon, Business Reporter
Supermarket attendant, Simone Stanley, shows off some of the fine array of Lascelles wine. - contributed
Boosted by strong gains in its general merchandise and general insurance segments, Lascelles de Mercado and Company Limited recorded an almost nine per cent increase in net profit for the nine-month period ending June 30.
The group's unaudited results showed a net profit of $1.79 billion for the period, reflecting an 8.7 per cent increase over the $1.6 billion for the corresponding period last year.
The conglomerate also managed to increase its current assets by six per cent to $14.23 billion, up from $13.4 billion for the comparable period last year, while its net current assets moved up from $7.7 billion to $8.4 billion for the third quarter ending June this year.
However, it was Lascelles' general merchandise segment that turned around the best performance in the nine-month period. Profit for this segment quintupled from $25.9 million at the end of a nine-month period in June 2006 to $145.9 million at the end of June 2007.
The Financial Gleaner up to press time was unable to get comments on the efforts of the group to grow this segment but, based on the unaudited results, the evidence may be seen in the administrative and marketing and selling expense which cut in as much as 80 per cent of the group's $5.58 billion gross profit for the period.
Lascelles raked up $4.04 billion in administrative and marketing expense for the nine-month period, reflecting a five per cent increase over last year's expenses.
Good business
The company's performance in the general insurance segment was also a main contributor to the group's profit during this period. Profit for this segment jumped by 72 per cent, moving from $228.4 million in 2006 to $393.2 million at the end of June 2007, while reinsurance assets grew by as much as 31 per cent from$700 million last year. This signals good business for Lascelles' flagship insurance company, Globe Insurance.
"Globe is more aggressive and insurance has continued strong growth. The importance of this is that Lascelles is better able to sustain or 'buffer' a hiccup in the liquor segment such as last quarter, by growing strongly in other areas," said Chief Executive Officer of Stocks and Securities, Mark Croskery.
But, profit for Lascelles Invest-ment segment declined by 24 per cent for the period compared to last year, when the company turned in gains of $424.86 million for the third quarter ended June 2006.
Short-term investments for the period, which amount to $2.19 billion, also suffered a decline by $586 million over last year's.
There was a marginal increase in operating revenue for the group, which was at $9.7 billion at the end of the period.
Strong performance
Other areas of strong performance for the group included cash and cash equivalent assets which increased by a little under $1 billion for June 30 from $2.1 billion registered in the corresponding period.
Sales from rums, wines and sugar raked in the bulk of the revenue, which, at $9.16 billion contributed to 58.8 per cent of the overall revenue. This was $1 billion more than last year's.
However, profit for this segment reflected only a moderate 12 per cent increase over last year's.
Stockholders' equity also moved from $18.5 billion to $20.5 billion and recognised gains per ordinary stock unit was $23.21 compared to $19.37 last year.
Earnings per ordinary stock unit is $18.68. Transportation profits bounced back to $10.4 million for the period, up from $6.2 million.
"Lascelles reported a strong quarter on core EPS. It continues to be the best company or stock listed on the JSE from a value and earnings standpoint," Croskery commented on the company's performance.
