New subsidiary, investment holdings weigh on LAB performance
Scope Caribbean weighed on the earnings of The Limners and Bards, which trades as The LAB, but it was mostly the media and advertising company’s investments that contributed to the erosion of its bottom line, constraining profit growth to less than two per cent.
The subsidiary, through which The LAB provides influencer marketing and talent services across the region, made losses of $2.5 million over nine months ending July, while the The LAB’s finance income, which generally includes investment income and foreign exchange fluctuations, fell from $20 million to less than $3 million.
Absent those two factors, The LAB would have reported year to date pre-tax profit growth of around 18 per cent.
Instead, its gain was confined to a marginal 1.5 per cent, rising from $142 million to $144 million, after finance charges and taxes, assisted by an 18 per cent surge in revenue to $1.1 billion over the nine-month period.
In the preamble to the company’s financial statements, LAB CEO Kimala Bennett said Scope – which was consolidated into the accounts in May 2021 – has seen a greater take-up of its services during the period under review, despite recording a loss.
She anticipates profitable returns in the coming year.
Scope started out as a location and talent directory, but midway its operation the focus shifted to a talent and influencer marketing agency. At the time, Bennett said that the multibillion-dollar influencer industry had been growing largely from an increased uptake in e-commerce, particularly in the United States and the United Kingdom, and now in the Caribbean.
Today, the platform is accessible by film producers, casting directors, agencies, and global brands looking to contractually employ creatives. Persons listed on the platform can be hired to create advertising campaigns, films, and TV shows specifically for brand influencers.
Last year, Scope acquired the licence aimed at improving campaigns for The LAB’s clients through better performance tracking. Overall, The LAB spent $15 million into the share acquisition and start up of Scope last year.