Lumber Depot associate, Atlantic Plumbing and Hardware, to raise $500 million via share offering on JSE

Associated company of Lumber Depot Limited, Atlantic Plumbing and Hardware, intends to offer new shares amounting to 20 per cent of its share capital on the Junior Market of the Jamaica Stock Exchange to raise $500 million. The offer is expected to be made in the group’s fourth quarter.

Management indicates that the proceeds of this initial public offer will be used to reduce the debt and debt service costs of Atlantic and to support the overall growth of the business. The initiative will also reduce the income tax charge on the company and generally improve its business prospects. Associate company Lumber Depot intends to participate in the offering.

A focus on growth opportunities led to the acquisition by Lumber Depot of a 35 per cent interest in Atlantic Plumbing and Hardware Limited. This company is engaged in the supply of plumbing and hardware items to retail hardware establishments across Jamaica.

Management indicated on March 14, 2025, “Atlantic has a well-established position in this important market segment and will continue to focus directly on this business. Atlantic has performed generally in line with expectations and contributed $12.2 million to the year-to-date profit of the business.”

Subsequent to the acquisition of Lumber Depot’s interest, Atlantic relocated to a new and improved sales and warehousing facility on Marcus Garvey Drive and overhauled its information technology systems to strengthen its inventory control and service levels.

As an associated company of Lumber , representatives of Lumber Depot have been appointed to its board. These are directors: Jeffrey Hall C.D. (Chairman), Vikram Dhiman, Lisa Kong, Cmd. George Overton, Hon. Paul B Scott O.J., Melanie Subratie (Maj. Ret’d) Noel Dawes (Managing).

For Lumber Depot Limited, results of operations for the nine-month period ended January 31, 2025, were net profits of $118.85 million on revenues of $1.13 billion. This compares to $126.15 million made on $1.16 billion in the previous comparable nine months in 2024.

Management noted, “Although our business remains strong and highly competitive, the prevailing economic circumstances have led to some softening in sales (down 2.07 per cent relative to the prior year) coupled with necessary increases in selling, general and administrative costs. As a result of these factors, profit before tax was down 3.94 per cent relative to the prior year profit before tax of $126.15 million.”

Lumber Depot operates a full-service hardware store in Papine that serves the needs of large- and small-scale building contractors, as well as homeowners doing construction projects, renovations and repairs.

The Lumber Depot business has been in operation for over 20 years. Notwithstanding the strong market position of our Papine location, Lumber Depot has concluded that its long-term profit growth will benefit from investment in selective, other opportunities within the hardware industry, but outside of the core Papine location.

Management concluded, “We are pleased that despite the current challenges Lumber Depot continues to trade positively and to deliver strong results.”

Photograph: fernandeslumber.com

Caribbean Money Daily