Lumber Depot doubles profit
Published:Friday | December 11, 2020 | 12:18 AM
Construction material retailer Lumber Depot Limited has doubled its second-quarter earnings, comporting with the positive results of other companies that do business in the sector.
The company, which operates a hardware store, said it sought to keep inventory readily available during the period amid increased demand for supplies.
“During the period under review, a major area of focus for us was to maintain consistent inventory levels in all of the key hardware supplies – including lumber, steel and cement products – regardless of the factors affecting production and transportation of these items. We have been generally successful with this and in turn, this has improved our standing with key customers,” said Managing Director Major Noel Dawes in the preface to the financials.
Lumber Depot grew revenue by nearly seven per cent to $338.4 million for the quarter ending October; net profit rose 134 per cent to $36 million. Earnings per share rose from 2 cents to 5 cents. Half-year sales, from May to October, grew eight per cent, leading to a 79 per cent spike in profit to $66 million.
Construction activity, as tracked by government agency Planning Institute of Jamaica, has seen double-digit growth this year in a context where the overall economy is contracting at record levels due to the COVID-19 pandemic.
The northward climb is reflected in the performance of companies like cement maker Caribbean Cement Company Limited, which grew sales by 32 per cent in the July-September period, and reported robust profit of $1.2 billion, compared to $76 million of earnings in the comparative period of 2019.
Lumber Depot operates a full-service hardware store in Papine, St Andrew, that serves the needs of large and small-scale building contractors, as well as homeowners doing construction projects, renovations and repairs. The business, which has operated for 20 years, was spun off from soap maker Blue Power Group last year and listed on the junior market of the Jamaica Stock Exchange. Some of the growth in its earning is attributable to alleviated tax charges that new junior market listings are entitled to over 10 years.
Under the transaction, Lumber Depot Limited acquired the assets and liabilities of the Lumber Depot Division from Blue Power Group Limited in August 2019 and listed four months later.