Word on the street is that Lasco Distributors and Lasco Manufacturing are considering merging to become one company. But how would this affect their stock market performance? 

So the Lasco Group of companies includes Lasco Manufacturing, Lasco Distributiors and Lasco Financial Services. 

The late businessman Lascelles Chin founded LAS-D in the late 80s, and LAS-M in the early 90s. They’ve always been separate entities. 

LAS-M produces favourites like Lasco food drink and Lasco Jack mackerel. While LAS-D distributes all of LAS-M’s products and other healthcare and hygiene brands. Now, according to Executive Chairman of both LAS-M and LAS-D James Rawle, the companies have been considering a merger even before the pandemic. 

He said the plan kinda went on the back burner as the companies were figuring out what things would look like once their junior market tax incentive expired. LAS-M and LAS-D both listed on the junior market in 2010, so their 10 year tax break ended in 2020. 

Rawle said the next hurdle was moving the companies to the main market, which they did earlier this year.

So now they can focus on deciding whether or not a merger is a good idea. Rawle said over the last five years, the companies were able to massively improve their financial performance by investing in innovation and increasing efficiency.

According to their financial report for the year ending March 31, Las-M recorded a 7% increase in revenue to $12 billion. Net profit also rose by 14%  to $2.3 billion. 

Meanwhile, LAS-D brought in $29 billion in revenue, up 10% from the previous year, and $1.5 billion in net profits.

So really solid performances from both companies. 

The idea behind a merger is that a combined company could possibly perform even better, because you’d increase efficiencies and decrease some costs. 

But as Rawle said, the board is still considering it, and they want to be as strategic as possible. Because they’re rolling with the big boys now over on the Main Market and they are accountable to shareholders for every decision they make.

And that’s the bottom line.