News

May 26, 2017
26 May 2017

LASCO invests over US$23m in expansion thrust

Thursday, May 18, 2017

KINGSTON, Jamaica – The LASCO affiliated companies invested over US$23 million on expansion efforts across LASCO Manufacturing Limited (LASM), LASCO Distributors Limited (LASD) and LASCO Financial Services Limited (LASF) in the past financial year.

As at May 1, the combined market capitalisation reached $53.8 billion, putting the group of companies fourth behind the major banks – National Commercial Bank, Scotia Jamaica and Sagicor Group Jamaica – on the Jamaica Stock Exchange , a LASCO release said.

“I attribute our success in large part to our continued capital investment, increased efficiencies, productive workforce, affordable quality products, loyal customers and a marketplace conducive to growth,” Executive Chairman of LASCO, Lascelles Chin, was quoted as saying.

LASCO said it invested US$12 million in LASM and now features three modern production lines in the liquid plant, producing the LASCO iCool range of water and juice drinks and their newest product LASCO iDrade, a hydration drink. The boosted operational capacity is welcomed ahead of the new flavours due out this summer. The dry blend plant added Nutrify, a complete meal replacement drink, to its portfolio recently.

“In our continuing efforts to provide affordable, yet high quality products, we proudly translated our efficiencies into price reductions to Jamaicans on our most popular offerings. Effective this month, LASCO has dropped the price on our iCool water by 30 per cent and 20 per cent on our iCool juice drinks,” said Chin.

LASD saw an US$8 million investment on expansion “to a modern, efficient and effective distribution centre providing a significant increase in service levels to customers locally and internationally”.

The distribution arm, which subsumed responsibility for exports last year, now exports LASCO branded products to over 25 countries with more to be added, the release said.

The youngest LASCO branded company LASF invested US$3 million on expansion and now provides a wide range of money-related services to customers in upgraded facilities across the island. This includes the launch of its new consumer facing brand – LASCO Money, the new facilities on Red Hills Road, which features MoneyGram remittances, and offer cambio and loans services. The new western flagship branch in Bay West Shopping Centre, Montego Bay and opened seven micro-loan shops within the last financial year, the release said.

“Having laid a solid foundation, we are now improving our efficiency, reducing further expansion and marketing costs, while significantly increasing our profits,” Chin noted.

May 26, 2017
26 May 2017

Full LASCO Claim At US$490m In Pfizer Case

Sunday, May 12, 2017

Lasco Distributors Limted wants US$490 million as the full payout from Pfizer in the long-running court case, documents related to the case indicate. The figure translates to around $64 billion in local currency.

The courts are expected to make a decision shortly as both sides presented closing arguments in April in the long-running assessment of damages case.

A US$311-million judgment requested by Lasco’s lawyers was previously reported. But less known is the additional US$179.16 million of estimated interest. Additionally, the Jamaican Government could receive a tax windfall, amounting to around US$60 million, were the court to side with Lasco’s estimate.

Pfizer, however, has countered that the Jamaican entity should be paid no more than US$518,000 for the period it was not allowed to sell the drug.

Lasco Distributors, which is publicly traded company, has claimed that it suffered damages when it was barred by a court order from 2005 to 2012 from distributing the drug amlodipine (Norvase) which is used to treat high blood pressure. In 2012 the United Kingdom Privy Council upheld rulings by the local courts which favoured Lasco and another local firm, Medimpex.

In December 2015, Lasco outlined its claim in the Supreme Court to recover the money from Pfizer, which had obtained the restraining court order against Lasco and Medimpex Jamaica Limited, barring their distribution of the drug. Medimpex, a private company, is also claiming a sum for its losses.

The parties had been in court since 2002, when Pfizer claimed that the companies were infringing on its patent.

Attorney Vincent Chen, who represents Lasco in the case, says he expects a judgment by September.

“The judge said that she will make a ruling in the first week of the new term that starts in September, or sooner if she can,” Chen told the Financial Gleaner.

“We are confident that the amount claimed is reasonable because of the circumstances,” he said.

business@gleanerjm.com

May 26, 2017
26 May 2017

Money Transfer Agents Brace For Possible Fallout From Proposed US Remittance Tax

Money transfer agencies in Jamaica are bracing for a possible fallout if a proposed tax on remittances from the United States takes effect.

Acting general manager of JN Money Transfer, Horace Hines, says his firm is monitoring the discussions surrounding the proposal for the introduction of the tax.

He told The Gleaner/Power 106 News Centre that a tax on remittances is likely to have significant implications given that remittances contribute 17 per cent of Jamaica’s Gross Domestic Product – GDP.

Lasco Financial Services, the local agents for Moneygram, said this week that the imposition of such a tax would be unfair and would lead to higher service costs.

Another money transfer agency operating in Jamaica, Western Union, said that it was reviewing the proposal for the tax.

It says a tax on remittances has broad implications and suggests that it may push people to use unconventional means to send money to their relatives and friends.

The tax is outlined in a bill currently before the US Congress to amend the Electronic Fund Transfer Act to authorise the collection of a two per cent tax on remittances to 41 countries, which includes a number of Caribbean and Latin American countries.

The Opposition People’s National Party – PNP yesterday urged the government to pursue the necessary diplomatic channels to lobby the Donald Trump-led administration to scrap the proposal.

In a release, the PNP highlighted that the tax as proposed would have devastating effects on the Jamaican economy.

Jamaica receives about US$2 billion in remittances annually.

The PNP says the two per cent tax will result in Jamaica losing approximately US$40 million annually.

Foreign Affairs Minister, Senator Kamina Johnson Smith, says the government is actively monitoring the process and stands ready should the tax be approved to alert Congressional leaders, through the Jamaican Embassy in Washington, of the likely impact on Jamaica.

She also points out that the bill is only at the draft stage and many others which are brought to Congress annually fail to get approved.

May 26, 2017
26 May 2017

Jamaica Among Designated Recipients … New Remittance Transfer Fees To Fund Trump’s Wall

BY STEVEN JACKSON steven.jackson@gleanerjm.com

Sunday, April 26, 2017

The United States Congress has introduced a bill to impose a fee for remittance transfers to Jamaica and 41 other foreign countries, ostensibly to fund the building of a border wall with Mexico.

The bill, entitled Border Wall Funding Act of 2017, is intended to amend the Electronic Fund Transfer Act. It is sponsored by Republican Mike D. Rogers and was introduced in the US House of Representatives on March 30, according to information posted on the congress.gov website.

 

Increases Likely

 

Lasco Financial Services, agent for MoneyGram in Jamaica, views the developments of the bill as unfair and one which will increase the cost of providing the service, provided it becomes law.

“If this were to be enacted, it would effectively increase the cost of remittances, reduce the amount for the beneficiary, or motivate senders to find an alternate method of getting the funds to their families,” managing director of Lasco Financial Services, Jacinth Hall-Tracey, said in response to Gleaner Business queries on Tuesday.

She indicated that the most significant impact would be on the family receiving, since the sender may not be able to absorb the increase.

Don Wehby, group chief executive officer at GraceKennedy, agents for Western Union in Jamaica, said he would get the position of the money-transfer company and respond, but he did not up to press time.

The bill still requires approval by Congress, the Senate and United States President Donald Trump before it becomes law. Trump had campaigned on a promise to build a border wall with Mexico and get that country to pay for it. However, Mexico decided it will not pay.

According to information posted at congress.gov, on the same day the bill was introduced, it was referred to the House Committee of Financial Services, in addition to the Committee on Foreign Affairs and the judiciary for a period to be subsequently determined by the Speaker.

Action on the bill shows that on April 21, it was referred to the Subcommittee on Immigration and Border Security, as well as the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations.

It stipulates that if the designated recipient of a remittance transfer is located in a foreign country, a remittance transfer provider shall collect from the sender of such remittance transfer a remittance fee equal to two per cent of the United States dollar amount to be transferred, excluding any fees or other charges imposed by the remittance transfer provider.

“… Such remittance fees shall be submitted to the Treasury to be expended for the purpose of improving border security,” said the Bill.

It shall apply to designated recipients located in Mexico, Guatemala, Belize, Cuba, the Cayman Islands, Haiti, the Dominican Republic, the Bahamas, Turks and Caicos, Jamaica, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Aruba, Curacao, The British Virgin Islands, Anguilla, Antigua and Barbuda, Saint Kitts and Nevis, Montserrat, Guadeloupe, Dominica, Martinique, Saint Lucia, Saint Vincent and the Grenadines, Barbados, Grenada, Guyana, Suriname, French Guiana, Ecuador, Peru, Brazil, Bolivia, Chile, Paraguay, Uruguay, or Argentina.

 

Five-Year Period

 

The bill provides that for the five-year period beginning on the date of its enactment, a remittance transfer provider may retain up to five per cent of any remittance fees collected by such remittance transfer provider to cover the costs of collecting and submitting such remittance fees.

It said that “not later than September 30, 2017, the Bureau, in consultation with the Secretary of Homeland Security, the Secretary of the Treasury, and remittance transfer providers, shall develop and make available a system for remittance transfer providers to … submit the remittance fees collected … to the Treasury; and … retain a portion of such remittance fees. …”

The bill also stipulates that evasion of the remittance fee carries a penalty of up to US$500,000 or twice the value of the funds involved in the transfer, whichever is greater, or imprisonment for up to 20 years or both.

It also provides that any foreign country that, in the joint determination of the Secretary of Homeland Security, the Secretary of the Treasury, and the Secretary of State aids or harbours an individual conspiring to avoid the fee shall be ineligible to receive foreign assistance and to participate in the visa waiver programme or any other programmes.

Lasco’s Hall-Tracey said that “if the funds go into informal channels, then it becomes harder for the financial system to regulate the flow of funds. Remittances positively contribute to the education, healthcare and general economic maintenance of the recipient family”. she said.

Overall it would result in “a slight decline or slower growth” for the island, she said, as remittances would decrease in frequency.

“Since remittances are a lifeline and are really to fulfill obligations, the transfers will continue, but the per person transfers will decrease. If this happens, of course, there would also be an impact on the foreign exchange earnings for the country and all the other associated effects once there is a decline in currency flows,” Hall-Tracey said.

Asked if it was fair or equitable for Jamaica to finance US/Mexico border control? the Lasco Financial Services executive said: “Absolutely not, but the bill is obviously targeted at immigrants.”

Jamaica receives some US$2billion annually from remittances, which makes it a major source of foreign exchange.

The US Embassy in Kingston declined to comment.

steven.jackson@gleanerjm.com

December 19, 2016
19 Dec 2016

Lasco launches one-stop money shop

Lasco launches one-stop money shop

BY KARENA BENNETT Business reporter bennettk@jamaicaobserver.com

Sunday, December 18, 2016

LASCO Financial Services Limited (LFSL) has launched Lasco Money, a new one-stop money store concept for its suite of financial services.

The new consumer brand is now the umbrella name for all Lasco Financial Service’s products, including LFSL’s Money Transfer Service (MoneyGram), Lasco Money Rewards Programme, Cambio Service, Loans (Personal and Small Business), Bill Payments, Mobile Top Up, Retail Phone Cards, JUTC Top Up, ePAY Top Up and Plastic Bottle Recycling Voucher Redemption Point through Recycling Partners of Jamaica.

“We are merely simplifying money matters for our customers,” Marketing Manager at LFSL, Nicolene Donaldson stated in a release from the company.

“Our Lasco Money stores offer a myriad of services. There is no need to receive your remittance at one place, change your foreign exchange at another, then go somewhere else to pay bills… plus there are so many more services that we offer at our money stores,” she continued.

According to Donaldson, in launching the Lasco Money brand, the company will also be promoting a rewards campaign which will see all Lasco MoneyGram customers get discounts for goods and services through select merchants islandwide, when transactions are done through any of its 124 agent locations.

Each LFSL branch and agent location will be branded Lasco Money, but the full range of services are only offered through branches in Montego Bay, Papine and Red Hills Road. Other agent locations will offer either remittance, loans or bill payment services.

Lasco Financial has recently been reorganising its portfolios to capture more market share. Just last month the company exited the mobile phone distribution business in light of dwindling profits.

Managing Director Jacinth Hall Tracey told the Jamaica Observer that the company would instead redeploy resources to focus on the growth and development of existing business lines. “The objective of entering the phone distribution business was not being achieved as envisioned, as the turnover of phone sales was slow,” she said.

 

November 24, 2016
24 Nov 2016

Lasco Financial Heads West As Business Grows

Lasco Financial Heads West As Business Grows

Jacinth Hall-Tracey, managing director of Lasco Financial Services Limited.

Lasco Financial Services Limited has opened a new location in Montego Bay and relocated its Red Hills Road branch to more spacious accommodation in Kingston.

The micro loan and money-services company invested just under $3 million to set up its new location at Bay West Shopping Centre, said managing director (MD), Jacinth Hall-Tracey. Five employees have been added there, with plans to hire at least two more.

“We took our first customer (last) Wednesday,” Hall-Tracey said. The new branch offers the full gamut of services: micro loans, remittances, cambio and bill payments.

It cost “a lot more” to relocate the Kingston branch, but Hall-Tracey would not say how much. Lasco Financial is taking over space across the street formerly occupied by affiliated company, Lasco Manufacturing Limited. Its financial disclosures show that Lasco Financial’s investment in plant and property quadrupled at year ending March 2016 from $8 million to over $35 million. Since then, the company has invested another $17 million.

“While Montego Bay had counters and floor space suitable to the offerings, the manufacturing site needed more resources in order to convert it,” she said.

 

BURSTING AT THE SEAMS

 

“We had been occupying that location since we opened 12 years ago,” she said of the former locale at 29 Red Hills Road. “Once you pass 12 persons, its full. Then, our administrative location was there too; so, as we started adding services and growing the business, we were bursting at the seams.”

Lasco Financial’s administrative arm was the first to move two years ago. It was done to give the money services part of the operation more space to deliver its services, but even so, the business still needed more room.

“So now we have just consolidated everything to get everybody under one roof,” the MD said. The new headquarters spans nearly 3,000 square feet at 381/2 Red Hills Road.

Having moved in, Lasco Financial now plans to modify the entire parking lot and driveway to reincorporate its drive-through window.

The company has grown its remittance network from 98 locations in August 2015 to 124 locations up to August 2016. It distributes loans from seven locations.

The company closed its September second quarter with revenues of $272 million, up 19 per cent.

Core business lines grew revenue by nearly $50 million, however, other revenues fell as the company opted out of the phone distribution market.

Hall-Tracey said sales of mobile devices were coming in too slowly and so was not worth the investment.

“It was slow, so we just decided to refocus on our core. We wanted it to turn over our GCT a lot faster, so we would have a lower net receivable from the Government but it wasn’t been fulfilled,” she said.

Lasco Financial entered the phone market in 2015 with an announcement that it would be distributing Huawei devices in Jamaica. Staff from what Lasco called its telecoms unit were deployed elsewhere, and the inventory sold off by the end of August, the MD said.

Lasco Financial’s net profit fell to $42 million in the second quarter, from $60 million in the 2015 period – a gap partly explained by an $11 million corporate income tax bill. Lasco Financial enjoyed a 100 per cent corporate tax waiver for five years, which has been cut to a 50 per cent waiver for another five years.

Six-month earnings have fallen from $114 million to $100 million.

The company sports $1.4 billion of assets, the largest portion of which is a loan portfolio of $550 million and cash of more than $475 million. Its loan book has grown by $120 million in the past year.

November 9, 2016
09 Nov 2016

LASCO Financial Exits Mobile Phone Business

Lasco Financial Exits Mobile Phone Business

By Karena Bennett

Wednesday, November 09, 2016

 A Huawei smartphone

 

Lasco Financial Services Ltd has exited the mobile phone distribution business.

The company, which entered the mobile business last September, said it has seen a decline in other income by $6 million for its second quarter ending September from discounting inventory sales to exit the phone distribution business.

“The objective of entering the phone distribution business was not being achieved as envisioned, as the turnover of phone sales was slow. We subsequently decided to redeploy our resources and our focus to the growth and development of the existing business lines,” Managing Director Jacinth Hall Tracey told the Jamaica Observer in an emailed response yesterday.

Last September, Lasco Financial began distributing open-market mobile devices and accessories at select agent locations across the island after receiving authorisation to distribute Huawei devices in Jamaica.

The company planned on capitalising on the emergence of global mobile payment trends to increase revenue earnings for both the sale of mobile devices and the conducting of everyday financial transactions, despite a competitive telecommunications industry.

But while the mobile side of business was experiencing declines, Lasco Financials remittance network has grown to 124 locations, up from 98 locations in August 2015, which led to the company doubling employment numbers over the past year.

“We have grown our loans locations from one to seven locations islandwide, including two between July and September,” Hall Tracey stated in notes accompanying Lasco Financial’s results.

Later this month the company will launch its flagship Financial Centres in Kingston (relocation) and Montego Bay, offering all core products, including: remittances, cambio and loans, among other value-added services.

From the expansionary activities, Lasco Financial saw an overall increase year over year of 29 per cent on expenses for the quarter. The increased expenses, in addition to taxation at 50 per cent of the enacted rate for the next five years, resulted in net profit declining to $42.4 million from $60 million year over year. Total assets of the company, however, increased by $361 million to $1.4 billion.

“This investment was necessary to build capacity in the core business to allow us to continue to achieve our growth objectives. Our staff complement has doubled and now stands at 80 very keen and able professionals who are also integral to our growth objectives.

“We also continue to engage our customers and support our agents through local, below the line marketing activity and continue to mark our presence in the US diaspora. New for this year is our support of our MoneyGram counterpart in The Bahamas, where we participated in the Jamaican Independence activities in that country,” she said.

 

October 11, 2016
11 Oct 2016

Lasco To Invest Another US$10m In Manufacturing Operations

Lasco To Invest Another US$10m In Manufacturing Operations

 Published:Sunday | October 2, 2016 | 12:00 AMSteven Jackson
Chairman of Lasco, Lascelles Chin.

Lasco Manufacturers Limited (LML) announced plans for another round of investment totalling US$10 million ($1.3 billion) for the ensuing financial year as the company ramps up exports.

It builds on the US$4.5 million spent a year earlier.

“We will spend US$5 million on the building we talked about 62,000 square feet then another US$5 million on the equipment to in order to triple capacity,” said chairman Lascelles Chin at Lasco’s annual general meeting on Friday.

With the increased investment, the company expects to double profits in two to three years. LML earned $826 million in net profit on $6.5 billion in revenues for its year end March 2016, or 34 per cent higher net profit year on year.

The upgrade will allow for new products lines and increased output of its new lead product, iCool.

Sister company Lasco Distributors Limited now exports iCool to six countries in the region, with plans to enter Trinidad & Tobago, and Panama. The company plans to utilise the Massy Group to distribute its drink in T&T, while offering other products to other distributors.

Lasco will also re-enter Haiti – which performed well on sales but poorly on receivables – but will only sell dry products in that market as liquid products attract a prohibitive 40 per cent duty.

Lasco asserted to shareholders that it is the number-one company in its class in the Jamaican market and number two in Barbados and also Guyana.

The iCool drink is sold in six Caribbean countries.

“Between March and August, the company exported 54 containers; in September alone, 20 containers were exported; and for October, we already sold 30 containers,” said Chin. “We are only now selling to six countries, and we are planning to sell to 14 other countries in the Caribbean.”

steven.jackson@gleanerjm.com

August 15, 2016
15 Aug 2016

LASCO Financial Grows Telecom Division

LASCO Financial Grows Telecom Division To 12 Locations

Lasco Financial Services Limited (LFL) grew its phone sales division to a dozen locations during the first six months of launching the service, which contributed to the company nearly doubling the LFL staff count.

The company introduced its ‘telecoms’ arm mainly to capitalise on the growth of the smartphones markets as the devices became more affordable. LFL also operates a cambio, money transfer, bill payment and loans services, employing 69 staff overall up to March, the end of its financial year.

“At half-year, we began the roll-out of the business loans division and the phone distribution through select agent locations islandwide. The fast-paced roll-out of 12 phone distribution locations and five business loans locations caused a near-doubling of our staff complement,” said LFL in its financial report.

Lasco Financial, headed by Jacinth Hall-Tracey, posted $203.4 million in annual after-tax profit, up 6.4 per cent over the year. The quick build out of the telecoms unit increased LFL’s expenses. Overall, the company spent $126 million or 24 per cent more than the year before.

“These increases were directly related to our expansion strategy as necessary costs which should help to yield greater returns in the future,” said Lasco Financial, adding that additional expenses were incurred for advertising support for the phone distribution segment and continued marketing activities to support the brand in key diaspora corridors.

Total revenue for the March 2016 year end increased 22 per cent to $870 million.

LFL now holds $1.1 billion in total assets. Its capital bases expanded to $995 million from $812 million a year earlier.

“For the 2015-16 financial year, our staff complement was impacted significantly as the company expanded into new markets, creating value for our committed shareholders. Business loans accounted for over 33 per cent of the increase, while telecoms accounted for just over 25 per cent. The remainder was shared among the support departments of accounts, human resources, compliance, marketing, and remittance – a growth rate of 76 per cent year-to-date, which aggregates to 69 employees on record,” the company said.

The junior market company resumed paying income taxes last year – its bill for the financial year was $17.59 million. The 100 per cent waiver it had for five years has been reduced to a 50 cent waiver on corporate taxes for another five years, in line with incentives granted to companies listed on the junior market of the Jamaica Stock Exchange.

steven.jackson@gleanerjm.com

July 7, 2016
07 Jul 2016

Peter Chin Appointed Lasco Deputy Chair

Peter Chin Appointed Lasco Deputy Chair

Managing director of Lasco Distributors Limited, Peter Chin, has been appointed deputy chairman of all three Lasco affiliate companies, effective April 4.

Chin, who will continue in his current role as MD of Lasco Distributors, said he will act “on behalf of Chairman Lascelles Chin, in his absence and as per his instructions”, regarding the stewardship of the entities.

The sister companies to the distribution outfit are Lasco Manufacturing Limited and Lasco Financial Services Limited. Together, the three outfits posted combined profit of $1.7 billion at year end March 2016, up 29 per cent from $1.3 billion in 2015.

LASD is the top revenue earner of the three – accounting for $14.5 billion at year end – but was second in contribution to profit behind the manufacturing operation, whose goods it distributes.

“With respect to LASD, the company is growing at a fast pace and several measures are in place with respect to the management structure and operations, which will enable strong, sustainable growth,” Chin said via email.

He said his role of assisting all three entities with specific projects will also continue as the companies continue to push for growth.

“Whilst the chairman works closely with the leadership of each company in specific areas, the management teams of each affiliate plan, execute and manage their operations as per the strategic objectives of each entity,” the deputy chairman said.

Lasco companies at March 2016:

Profit Revenue

Distributors $717m $14.5b

Financial $203m $870m

Manufacturing $826m $6.6b

tameka.gordon@gleanerjm.com