SOS claws back sales revenue
STATIONERY AND Office Supplies Limited has nearly tripled its earnings year to date ending September, but it wasn’t enough to match the office equipment supplier’s prepandemic results.
The company, which is also in the business of manufacturing books, made a net profit of $78 million, a vast improvement on earnings, which had plummeted to $28.6 million in 2020, but still tracking 46 per cent behind the comparative nine-month period in 2019.
Sales revenue grew 13.5 per cent year on year to $809 million but trailed the $933 million of inflows in 2019.
“SOS was forced to drive sales based on discounted pricing, which reduced our profit margins for that year,” said Allan McDaniel, who was recently promoted from deputy managing director to managing director, in a statement appended to the financial report.
In the midst of the pandemic last year, SOS completed the acquisition of an adjacent property on Collins Green Avenue in Kingston that now doubles as a warehouse and showroom space for the office supplies company’s newest line of heavy-duty racks,
The racks, which are capable of holding up to 5,000 pounds of goods and double as space savers, are mainly used in the car-parts trade and food processing and hotel sectors. Previously, SOS was only supplying lightweight industrial racks. To plug bleeding revenue amid a shift to work-from-home arrangements, SOS also focused on home office furniture.
The company continues to make adjustments where necessary as it tries to keep both revenues and earnings intact, saying that “2021 has been a challenging year during which a lot of adjustments have had to be made to increase revenues”, including “higher inventory levels due to the world-wide shipping backlog and the power issues affecting China at this time”, McDaniel said.
The adjustments will not see the company adding any new products at this time. Instead, SOS will focus its energies on the expansion of the Fairview, Montego Bay office, which McDaniel says will get started in the second quarter of 2022.
The investment to be made in the Fairview expansion was not disclosed.