LASF’s Year-to-Date Performance Still Trailing, Despite Strong Q3 Performance

Despite recording an 18.6% improvement in its bottom line over the quarter, earnings s declined by more than 50.0% in the nine months to December 2023.
Revenues over the quarter declined by 2.5% yoy. This was due to the continued decline in revenues from all core services, and contribution from the new service was insufficient to offset the reductions.
Consolidated expenses for the quarter totaled $476.02Mn compared with $482.86Mn, a decrease of 1.4%. The improvement in expenses was underpinned by lower Administrative expenses, which decreased by 11.8%, a result of the efforts to control expenses. However, the results were tempered by higher selling and Promotions, which rose by 20.5%, reflecting increased support for the services over the comparable three-month period.
Although certain measures were implemented in the first quarter to control administrative costs for the financial year, there has been a general increase in marketing activity to promote all of the company’s services to improve the pace of growth in sales.
During the quarter, the company launched its LASCO MoneyGram Direct “Size Matters” campaign. This MoneyGram service will allow the sender to opt for cash pick up at a LASCO agent, for which the receiver is paid at a higher rate of exchange. This campaign will be continued into the coming periods and will be ramped up to achieve certain key objectives.
However, a combination of higher operating expenses and weak revenues resulted in the sharp falloff in the nine months earnings. Operating expenses were up 7.6% due to higher administrative costs and selling and promotion expenses. This was exacerbated by the 2.9% reduction in revenues over the period.
LASF’s stock price has increased by 6.3% since the start of the calendar year. The stock closed Monday’s trading session at $2.04 and currently trades at a P/E of 21.9x which is above the Junior Market Financial Sector Average of 18.3x.

(Sources: JSE & NCBCM)