Wed | Jan 27, 2021

SOS triples profit in June

Published:Wednesday | September 6, 2017 | 12:00 AMSteven Jackson
Deputy Managing Director of Stationery & Office Supplies Limited, Allan Douglas.

Increased inventory at Stationery and Office Supplies Limited, SOS, resulted in double-digit sales gains and a 147 per cent rise in pre-tax profit for the second-quarter ending June 2017.

The results are for the period which just preceded the company's listing on the Jamaica Stock Exchange, which occurred in August.

As such, the financials did not include earnings per share, which would have equated to roughly $0.08 for the June quarter, up from $0.03, based on the 250 million ordinary shares listed.

The increased inventory gave customers greater choices, which translated to increased organic sales, said SOS deputy managing director and director of warehousing and logistics, Allan McDaniel.

SOS made $20.3 million in pre-tax net profit on revenues of $211.6 million for its second-quarter 2017, compared to $8.3 million on revenues of $171 million a year earlier.

"The increased stock allowed us to record organic growth," said McDaniel, who explained the company continues to rake in business from individuals setting up offices, in addition to the growth in business processing outsourcing operations.

"Once the economy grows, then we will grow," he said.

Sales at the office supplies company increased 24 per cent, while expenses grew at a slower pace at around 16 per cent.

"Once we put in increased inventory, the more that will contribute to the growth of sales," McDaniel said.

SOS will grow its warehouse space in Kingston by more than half with its purchase of lands contiguous to its head office on Beechwood Avenue in Kingston. The facility at 34 Collins Avenue will add up to 20,000 square feet of office furniture and stationery space to SOS' current 35,000-square-foot warehouse on Beechwood Avenue, which sits on 58,000 square feet of land.

The new property will allow it to initially increase its warehousing space by approximately 10,000 square feet and then scale up to roughly 20,000 square feet, which would equate to 57 per cent growth of the Kingston warehousing space, SOS disclosed when it approached the market for equity capital this summer.

SOS plans to commission that warehouse in October, which will allow the company to store even more inventory and grow sales as a result. The company's inventory increased by one-quarter to $152.7 million in June, up from $121.2 million a year earlier.

"The outlook for the third quarter is looking promising," said McDaniel.

Over six months ending June, SOS made $50.4 million profit on revenues of $431.8 million compared with $37.8 million on revenues of $353.5 million at half-year 2016.