Lumber to expand operating base as business grows

Lumber Depot Limited is exploring expansion as the retailer grapples with inadequate operating space at its base in Kingston.

“We have approached a range of properties that would serve our expansion needs for storage, warehousing, and pick-up facilities for contractors,” Chairman Jeffrey Hall told the Financial Gleaner. “We expect to secure an additional Papine property before the end of this financial year,” he said.

Hall said the company would acquire an adjacent lot and merge with the existing property in Papine. In its financial disclosures, the company stated it is “actively seeking opportunities to expand the Papine facility”, noting that it has “secured funds” to invest in “adjacent properties in the area” and has identified suitable “prospects” for acquisition.

Lumber Depot, a supplier of construction materials, does business from the single location in Papine, but serves communities reaching into rural St Andrew. After more than two decades in operation, growing demand has pushed the site to its limits, with the store and parking lots frequently operating at full capacity. Acquiring nearby properties for expansion or additional parking is expected to ease congestion and support continued growth.

Beyond its core operations, Lumber Depot now holds a 29.3 per cent stake in Atlantic Hardware & Plumbing Company Limited, which is a new investment made last year. Atlantic this year became the latest company to list on the junior stock exchange, joining Lumber Depot, which was spun off by Blue Power Group and listed on the junior market towards the end of 2019.

“Atlantic has a well-established position in this important market segment and will continue to focus directly on this business. Atlantic has performed generally in line with expectations,” Lumber Depot said.

Atlantic has since relocated to a new sales and warehousing facility on Marcus Garvey Drive, Kingston, and upgraded its IT systems to enhance inventory control and its service levels.

For the first quarter ended July, Lumber Depot reported revenue of $401.5 million, up three per cent year-on-year, reflecting sustained demand in the construction sector. However, net profit fell 16 per cent to $37.9 million, impacted by margin pressures and a new tax charge.

The company recently began paying income tax after completing five years of full tax waivers allowed for new junior market companies. It will now receive a 50 per cent waiver, and pay corporate tax at a rate of 12.5 per cent, under the 10 years of tax breaks built into the incentive scheme.

The transition introduced $5.4 million in taxes for the quarter, compared to no tax charges in the same period last year. For Lumber’s full financial year ended April 2025, income taxes totalled $3.7 million.

“We were able to contain our overheads and deliver steady overall operating profits,” said Hall.

When asked whether the activity leading up to the general election on September 3 had influenced performance or demand for the second quarter ending October, Hall declined to comment directly, but said, “Lumber Depot has a strong competitive position and will get its fair share of any increase in overall market demand.”

steven.jackson@gleanerjm.com