Senior Wealth Advisor at Ideal Securities Brokers Limited, Dwayne Taylor, says Stationery & Office Supplies Limited’s (SOS) strategic planning played a major role in the company doing record-breaking business in 2021.

According to the company’s results for the year ending December 31, 2021, SOS recorded a 210% increase in pretax profits and a 16% jump in revenue compared to 2020. 

The company said that this performance was the second-highest profit and revenue in its 57 year history.

SOS’s net profits also jumped an impressive 224 percent to $107 million compared to $33 million in 2020. 

“For SOS their model didn’t really change; they have been consistent with the products that they’re offering. However, they made a big decision by increasing their inventory in anticipation of any potential shortages,” Taylor said. 

“Because of that increase they were able to meet market demand,” he added.

In a statement last week, the company’s Managing Director, Allan McDaniel, also attributed SOS’s positive results to its strategic plans.  

“Our plans to maintain a high stock level were a major factor due to the surge in shipping costs which saw prices skyrocketing to an increase up to 400 percent per shipping container,” he said.

“We increased our inventory by almost 30 percent which included an increased stock of work-from-home furniture that was in high demand, industrial racking, and ergonomic leg, back, and neck supports.  If we did not have increased quantities of stock available, we would have seen a drastic reduction in our revenues,” he added. 

SOS’s business is broken down into three segments; furniture, books and stationery and other. 

“For 2020, furniture was their dominant business line ($773 million in revenue) but it definitely took a pull back in 2021 ($462 million in revenue) and I think that was partly due to companies not needing as much furniture with people working from home,” Taylor noted.

“Maybe agreements that were in place for businesses to buy additional furniture fell through, so they took a hit in that area,” he added.

However, the stationary and others segment saw an increase from just over $200 million in 2020 to $614 million in 2021. The books segment also increased from $38 million in 2020 to $48 million in 2021.

Taylor noted that the company’s revenue may continue to skyrocket as students return to the classroom for in-person learning. He said this would increase demand for some of SOS staple products such as Seek books. 

According to the company’s statement, SEEK’s revenues increased from $38.3 million at the end of 2020 to $47 million at the end of 2021.  

“This increase is very significant as it was achieved without the full reopening of schools and the focus was mainly on products being used in corporate Jamaica.  Schools are hoping to return to full face-to-face classes in 2022, and this will once again create a demand for SEEK school books,” Board Chairman, Stephen Todd said in the statement.

As for the stock market’s reaction to the positive news, SOS ended trading at $7.16 on Friday, March 11 up 50% from $4.77 a year earlier. Taylor said that it is expected that initially, investor interest will drive up the company’s stock price but eventually it may plateau. 

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