John Mahfood, chief operating officer of the Hardware and Lumber group.
-File photo
Ashford W. Meikle, Staff Reporter
THE HARDWARE and Lumber group (H&L), headed by chief operating officer John Mahfood, has returned a strong performance for its nine months ending September 30. The unaudited financials show that the company has returned net profits of almost $101 million on gross revenues of $3.9 billion. This represents an increase of almost 200
per cent in revenues over the
corresponding period for 2003.
Net profits registered a 140 per cent increase when it went up to $101 million. With the exception of the agriculture division, the other business segments of the group registered growth. In his statement accompanying the financials, Mr. Mahfood noted: "The retail division achieved a sales increase of 19 per cent over 2003. The wholesale division exceeded prior year sales by 58 per cent and the agricultural division saw a minor decline in sales, due to the sale of the marine business.
HARDWARE IMPROVES
"There was minimal overall impact on the group as a result of Hurricane Ivan there was improvement in the hardware side of the business in the second half of September, but the
agricultural side experienced a decline due to the serious
damage caused to this sector."
Overall, while there were increased revenues and profits, expenses increased along the same level. For example, cost of sales increased by 180 per cent, from $1 billion last year to $2.8 billion. As a result, gross profits increased by 173 per cent to close out at a little over $1 billion. Operating expenses increased by 181 per cent, moving from $319 million to $898 million. There was a 174 per cent increase in operating profit, which went up from $70.5 million to $192
million. The strong performance translated in the group's earning per shares (EPS) as well. The nine-month period saw a 44 per cent increase in the EPS, which moved from $1.04 to $1.50.
This quarter's result improves on the last quarter (to June 30) and demonstrates that the group has begun to benefit from the synergies of the merger. There was, for example, a nine per cent increase in revenues $1.36
billion compared to $1.25
billion last quarter. And, the net profit of $46 million earned this quarter represents a 39 per cent appreciation over the last quarter.
MERGER
The H&L group is a merger of Hardware and Lumber Limited, Rapid & Sheffield and Agro-Grace Limited. Conglomerate Grace, Kennedy and Company owns approximately 70 per cent of the entity while Pan Jamaican Investments owns 25 per cent. The group, with three principal divisions retail, wholesale and agricultural has a market
capitalisation of $1.4 billion.
Since the merger, H&L has taken an aggressive marketing stance to consolidate its position in the marketplace. The company will be investing US$1 million to upgrade its information technology system.
