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Lumber Depot beats the trend, sees 11% growth in sales

While the Planning Institute of Jamaica (PIOJ) has noted a fall in real value added for the construction sector last quarter, some companies within the sector continue to see growth.

Employees at Lumber Depot in Papine, St Andrew, Jamaica, pause for a photo. (File photo)

Lumber Depot Limited for first quarter ended July 31, 2020, reported net after‐tax profits of JM$29.91 million, a 40 per cent increase year over year.
Revenue grew 11 per cent to JM$361.2 million in the quarter. Management said the Lumber Depot business benefitted from strong sales growth as well as the favourable corporate income tax treatment associated with being listed on the Junior Market of the Jamaica Stock Exchange (JSE).

“The solid growth in revenues was directly related to our successful efforts to secure adequate stock levels and to maintain competitive pricing for all key hardware items,” according to the quarter’s report.

The construction supplies company operates a full‐ service hardware store in Papine, Kingston, serving the needs of large and small‐scale building contractors, as well as homeowners and service professionals doing construction projects, renovations and repairs.

Lumber Depot Limited in Papine, St Andrew, Jamaica. (File photo)

The business has been in operation for over 20 years. Management says it has established a market leading position in the communities directly served.

Lumber Depot Limited acquired the Lumber Depot business assets and liabilities from the Blue Power Group Limited with effect from August 1, 2019.  This company was then listed on the JSE Junior Market with effect from December 16, 2019.

Management stated that having compared the company’s performance with the performance of the Lumber Depot business during the comparable three‐month period of the prior year, when the Lumber Depot business was owned and operated by the Blue Power Group, revenues climbed 11 per cent relative to the comparable period in the prior year.

Management stated in remarks attached to the results, “Lumber Depot recognises that the COVID-19 pandemic presents significant challenges for the Jamaican economy. Curfews, travel restrictions and new workplace rules have presented risks to our supply  chain, have strained consumer and business confidence and have resulted in increased volatility in  exchange rates.

Lumber Depot Limited saw after‐tax profits increase 40 per cent increase for first quarter ended July 31, 2020.

“Our strategy is to manage through these challenges while consistently offering competitive prices on our products, upholding our service standards and prioritising the safety of our  customers and staff.  We are also working very closely with our key customers.”

Real value added for the Construction industry in Jamaica fell by an estimated 3.0 per cent in the April to June quarter, according to the PIOJ.

This was due to lower activity in the Building Construction and Other Construction components.

The decline in activity in the Building Construction component stemmed from lower Residential and Non-Residential Construction activities reflecting; NHT Housing starts (down 65.0 per cent to 350 units) and an estimated downturn in non-residential building activities, including hotel and commercial building construction.

The Other Construction component was as a result of reduced capital expenditure on civil engineering activities reflecting lower expenditure from the National Work Agency and Jamaica Public Service.