LASM Ends 2022 With 20% Bottom Line Growth

• Lasco Manufacturing Limited (LASM) recorded a net profit of $2.08Bn for the financial year that ended March 31, 2023. This represents a 21.9% yoy increase in profitability.
• Revenues for the year were up by 18.6% yoy to $11.24Bn which was driven by upward price adjustments. Cost of sales grew by 19.3% yoy in response to input cost increases due mainly to supply chain instability and inflationary pressures. As a result of the cost of sales increasing at a faster pace than revenues, the gross margin fell, but slightly from 36.7% in 2022 to 36.3%.
• Administrative Expenses were up 14.5% yoy to $1.32Bn, primarily due to increased staff costs as well as advertising and promotion.
• LASM’s stock price has decreased by 0.95% since the start of the calendar year. The stock closed Thursday’s trading session at $4.18 and currently trades at a P/E of 8.3x which is below the Junior Market Manufacturing Sector Average of 22.3x.
• LASM continues to prioritize organic growth and incremental margin improvements, continued investments in its brands, innovation, and technology. Though price pressures are likely to continue, at least in the medium term, LASM has committed to finding the right balance between price adjustment and savings through operational efficiency and productivity gains.

(Sources: JSE and NCBCM Research)