Lasco Financial Exits Mobile Phone Business
By Karena Bennett
Wednesday, November 09, 2016
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.