Hurricane Melissa Steals Airtime from The LAB’s Q1 Earnings

• For the quarter ended January 31, 2026 (Q1 2026), The Limners and Bards Limited (The LAB) recorded a net loss of J$13.67Mn, reversing the J$21.60Mn profit recorded in Q1 2025. The loss occurred amid Melissa-induced revenue pressures across all three business segments.
• Q1 revenues were cut by 40.3% to J$170.85Mn, as Hurricane Melissa disrupted commercial activity across Jamaica during November and December, historically the strongest months for advertising, media and promotional spending.
• With the sharp drop in revenues, gross profit fell 43.0% to J$57.36Mn, despite a falloff in direct costs (-33.8%), which contributed to gross margin compression from 35.1% to 33.6%. A temporary reduction in the Agency segment and production assignments being delivered during the quarter were behind the reduction in costs. That said, management expects project flow to recover and margins to trend toward more typical levels. Meanwhile, operating expenses (OPEX) were relatively flat (-3.6%). But ultimately, the sharper gross profit dip dragged the company to a $16.68Mn operating loss.
• Management views the quarter's weak results as a timing effect of an extraordinary external event and expects activity to normalise as commercial confidence recovers across the Caribbean. However, beyond Melissa’s impact, the Lab’s revenues have been declining as clients become more conservative with ad spend amid soft macroeconomic conditions. Changing advertising spending patterns in the face of consumers' increasing pivot to social media have impacted the demand for LAB’s media business and are likely to continue, as clients continue to pivot to more cost-effective advertisement solutions.
• Looking ahead, The LAB continues to advance several strategic initiatives that could meaningfully diversify and grow its revenue base. Its film slate under the Five in 25 initiative has attracted interest from international streaming platforms, and its first film release on YouTube garnered over 14,000 views within 24 hours of launch. Its trolley advertising platform is also expanding regionally, with contracts signed for a pilot in Guyana.
• Additionally, the company has begun testing AI-enabled production and marketing solutions with select clients. Management has described early feedback as positive.
• LAB's stock price has decreased by 11.5% since the start of the year to close at $0.92 on Wednesday, March 18, 2026. At this current price, the company’s P/E sits at 92.0x.

(Sources: LAB Financial Statements & NCBCM Research)