Lasco projects 40% more revenue from MoneyGram deal
Published:Sunday | November 27, 2011 | 12:00 AM
Lasco Financial's revenues are expected to jump 40 per cent from the doubling of its MoneyGram remittance locations to 155 with the pending acquisition of Supreme Ventures Limited's (SVL) interest in that business.
The deal is expected to close in December.
Supreme Ventures earned J$81 million in revenue from its MoneyGram operations in 2010.
"The acquisition allows us to double up on the number of locations currently in our purview and as such will lead to an increase in transactions. It places us in the position to increase revenues by about 40 per cent," said Lasco Financial Operations Manager Nordel Leach told Sunday Business.
SVL sold its MoneyGram remittance operations to Lasco Financial for nearly J$40 million subject to regulatory approval. Lasco operates some 67 locations and will expand to include SVL's 88 locations. For SVL, the sale will allow it to focus on its core gambling operations.
"Management has long said that we are restructuring to focus on our core business," said SVL's head of communication, Sonia Davidson, last Thursday. MoneyGram services are now locally offered by Alliance Investment Management Limited, Jamaica National Building Society, Lasco and NCB Remittance Services.
Mayberry Investments Limited will act as the financial adviser for the transaction expected to conclude on December 1, 2011. The transaction, approved by MoneyGram International, is subject to the approval of the Bank of Jamaica, regulator of remittance businesses.
"The consideration for this deal is J$38 million and Lasco Financial expects this transaction to be accretive to earnings," said an SVL release.
Lasco number one
Lasco has been a MoneyGram agent since 2004.
"When we entered the remittance industry, we were one of six MoneyGram agents. We enjoyed an aggressive growth path and within four years surpassed the previous leaders to become the largest agent in terms of number of transactions. Today, we are one of four MoneyGram agents, still in the number-one position and carrying a network of 67 sub-agents and growing," the company said in its 2010 annual report.
For Lasco, remittances account for the strongest of the three main business segments, contributing 65 per cent of the J$226 million in total revenue.
"This division continues to grow faster than the industry and MoneyGram's rate into Jamaica. This is due to relentless pursuit of our strategy. Cambio, on the other hand, is more sensitive to market indicators. The strategies we pursue in this division, including our inroads into the retail market, still make us competitive," said the financials.
In February 2010, Lasco MoneyGram was presented with the award for top remittance agent in Jamaica for over two years, said the release.