H&L's slow climb out of the red
Published:Wednesday | November 9, 2011 | 12:00 AM
Hardware and Lumber Limited, operator of Rapid True Value stores, has been racking up profit at the rate of J$605,000 per month in a sign of slow but steady progress.
The current nine-month performance is in striking contrast to the J$1.5 million per month that the hardware company was losing this time last year.
The turnaround coincides with a redo of the retail chain to mimic the store model of its American partner True Value Inc, as well as a revamp of the company's supply chain. The last two stores to be upgraded were Montego Bay and Ocho Rios.
Hardware and Lumber grew sales nine per cent to J$4.5 billion and spun a J$14-million loss into J$5 million of net profit over nine months ending September 2011.
The company had its best period in the third quarter which returned profits of J$6.88 million. CEO Simon Roberts said in a company statement that he expects the December quarter to show further improvement. Christmas has seasonally been the best period for the hardware retailer.
Rapid True Value operates 11 retail centres nationwide.
"We continue to focus on improving supply-chain management and product-mix variation to ensure profitability," said Roberts.
The wholesale segment reported a 14 per cent increase in revenue for the nine months but continues to face rising transportation costs. The agricultural segment also recorded a 12 per cent growth in revenue.
Hardware and Lumber trades in hardware, lumber, household items and agricultural products. It is 58 per cent owned by GraceKennedy Limited.
The company's shares trade at J$6, valuing the company at J$487 million on the stock market; compared to net book value of J$957 million, or J$11.83 per share at September.