Stationery and Office Supplies (SOS) Reports Increase in Year End Profits

• Supported by higher revenues, finance income and foreign exchange gains, Stationery and Office Supplies (SOS) net profit grew by 8.4% to $277.93Mn (EPS: $0.12) for the financial year ending December 31, 2023.
• Revenues increased by 10.7% (or $187.02Mn) on the back of robust sales growth stemming from its new Evolve furniture line and growth in its SEEK portfolio. Finance income and foreign exchange gains also rose by 1,111.0% (or $3.75Mn) and 395.57% (or $4.75Mn), respectively, contributing to the improved bottom line.
• Gross profit in 2023 reached $982.08Mn surpassing the $836.22Mn generated in 2022. Consequently, gross profit margin increased by 2.9 percentage points, reflecting better inventory management as damages and various losses were reduced throughout the year.
• Due in part to increased administration and other expenses (+21.1% or $84.31Mn) and higher depreciation and amortization costs (+22.45% or $6.75Mn), operating expenses rose during the period. Despite these increases, revenue outpaced operating expenses resulting in a 23.0% (or $60.73Mn) increase in operating profit.
• Profits were however tempered by a significant 96.8% (or $26.45Mn) increase in income tax due to the company being in its 6th year of trading on the Jamaica Stock Exchange. This means that it paid 50% of the income tax levied on corporations as per JSE rules for junior market companies.
• SOS’s stock price has decreased by 6.4% since the start of the calendar year, closing Tuesday’s trading session at $1.57. At this price, the stock currently trades at a P/E of 13.08x earnings, which is below the Junior Market Distribution Sector Average of 15.04x.

(Sources: Company Financials and NCBCM Research)