Lumber Depot sales dip down despite pre-hurricane boost
Published:Friday | September 20, 2024 | 12:12 AM
Lumber Depot Limited, which trades in lumber and cement, suffered a reduction in sales for the July first quarter, amid the passage of Hurricane Beryl.
The increase in hurricane-preparedness purchases of lumber to protect windows and storefronts wasn’t enough to offset the reduction in institutional-construction activity. Rain affects not only working conditions, but also the integrity of drying cement.
“During the period, our customer base faced uncertain economic conditions, including elevated interest rates, increased operating costs, and the disruption to construction activity arising from Hurricane Beryl,” said Lumber Depot Chairman Jeffrey Hall in a statement published with the earnings report.
Revenue for May-July dipped seven per cent year on year to $386.5 million from $417.5 million. Profit fell 14 per cent to $45.2 million from $52.6 million.
“Despite the challenging environment, our business remained solidly profitable and highly competitive,” said Hall, pointing to the company’s resilient cash holdings, which inched up by $5 million to $234 million.
Lumber Depot runs a hardware store in Kingston, catering to both large and small-scale contractors, as well as homeowners involved in construction, renovations, and repairs. The store serves the residents and students in the university environs along with residents in the hills of St Andrew and contractors from various parishes.
The complex, however, suffers from lack of parking and operates close to its full capacity.
In May, Lumber Depot acquired a 35 per cent stake in Atlantic Hardware & Plumbing Limited for $210 million, expanding its footprint in Jamaica’s hardware and building- materials sector in the process.
“Our strategy for Lumber Depot also involves business expansion and acquisition opportunities,” said Hall. “This investment is expected to enhance profitability in the coming years.”