Sat | Nov 25, 2017

Lasco Distributors looks to salted fish for more revenue

Published:Friday | November 3, 2017 | 12:00 AMSteven Jackson
Peter Chin, managing director of Lasco Distributors Limited, and deputy chairman of the Lasco affiliated companies.

​Lasco Distributors raved about its new canned salted fish as the forerunner of new products at the distributorship, seeking to avoid flatlining from its own success.

The company plans to roll out new products annually, and launched its first-to-market canned salted fish in July as part of that strategy.

"It became an instant sensation with shoppers raving about the novel idea of salted fish in a can," stated Lasco in its quarterly financial report for September.

However, it was not enough to grow quarterly sales overall at the distribution company.

The company's net earnings were modest in the September second quarter and also for the year to date, at six cents per share and 12 cents per share, respectively. But investors in the company were more interested in the Pfizer case ruling to be handed down by the court today, rather than Lasco Distributor's quarterly returns, and have been going after the stock.

This week, the LASD shares hovered at record highs, closing at $7.88 midweek with some investors buying as high as $8.49.

For the quarter, the company earned net profit of $211.6 million on revenues of $4.2 billion. Its revenue actually declined marginally by $23 million or 5.4 per cent, year-on-year, but profit increased by roughly $6 million or 2.9 per cent.

The quarter is basically flat when compared with 2016 but trends lower than 2015. Two years ago, the company's earning shot up as it benefited from increased market share for the iCool beverage. Then, in the second quarter of 2016, the company was hit with legal fees related to its court case with Pfizer, and lack of warehouse space. It resulted in earnings dipping from eight cents per share to six cents, year-over-year.

Now, a year later, the company expects a boost from the Pfizer judgment.

Lasco Distributors wants US$490 million as the full payout from the American drugmaker, documents related to the case indicate. The figure translates to around $63 billion in local currency.

Pfizer, however, has countered that the Jamaican entity should be paid no more than US$518,000 for the period it was not allowed to sell the drug.

Lasco Distributors, which is a publicly traded company, has claimed that it suffered damages when it was barred by a court order from 2005 to 2012 from distributing the drug amlodipine (Norvasc), which is used to treat high blood pressure. In 2012, the United Kingdom Privy Council upheld rulings by the local courts, which favoured Lasco and another local firm, Medimpex.

The parties had been in court since 2002, when Pfizer claimed that the companies were infringing on its patent.

steven.jackson@gleanerjm.com