3 days ago
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New stock market entrant Atlantic Hardware & Plumbing Company Limited is looking towards large developments and the hotel sector to boost its revenue and firm up its bottom line.
Revenue for the June second quarter was flat at $405 million, compared to $409 million in the comparative 2024 period, but up nine per cent over the longer half-year horizon, January-June, at $864.3 million.
The top-line gains did not flow to the bottom line, as net profit fell to $34 million, compared to $45 million in HY2024.
However, the $17.49-million profit for the second quarter, April to June, reversed the $50,000 loss in the comparative period in 2024.
Atlantic Hardware CEO Deanall Barnes said that given the relative sluggishness of the construction sector, the company is taking a more targeted approach to revenue generation. Atlantic Hardware has expanded its salesforce from four main sales reps to six, two of whom primarily target contractors and developers, particularly in the hotel sector, he said.
“We were not participating in that sector any at all,” Barnes said, adding that while the phraseology is yet to be finalised, the company is establishing a special projects division.
“The special projects division is targeting, primarily, the hotel developers. For example, we don’t trade in fire hydrants, but if we get a contract to bring in fire hydrants, we will do that. They may want special doors, and so on. That special project unit is targeting the sale of non-core items,” Barnes explained.
The company is also diversifying its product range to include the trading of lumber.
Even before its takeover by the powerful Musson Group, Atlantic Hardware was one of the go-to place for doors, plywood and plumbing fixtures in wholesale quantities. Now, the company is looking to expand its horizons, and has started discussions with major local lumber distributors, namely Tank-Weld and ARC Manufacturing, to enter into some form of trading arrangement.
“In the event that does not come to fruition, then we have open international access, and just earlier this month, we received a very small shipment, our first shipment. But the intention is to enter into relationship of commercial convenience with the major domestic players,” Barnes said.
Tank-Weld and Arc are the heavy hitters in the supply of dressed and treated lumber locally. Both have their own pressurised treatment plants, which allows for the final processing of lumber sold locally.
Barnes says Atlantic intends to open talks with the same two construction materials company; this time around metal-based products, with the exception of steel rebars.
“We are talking about merchant bars, to include squares, flats, smooth hollow section, chain-link fencing, and so on. We want to have a deeper or increased market share in common wire nails, galvanised nails, clout nails and concrete nails,” said Barnes, who once worked with Arc Manufacturing.
Atlantic Hardware’s complex was recently approved as a designated site by Jamaica Customs Agency. What that means is, the company can strip its cargo containers at its own complex instead of at the port, thereby saving on cargo handling costs.
“We have basically streamlined our expenses to an extent now where we are basically as lean as possible,” Barnes told the Financial Gleaner.
“Now that we have site designation, essentially, we’re saving about two per cent on our costs just by having such a facility … essentially, it goes straight to our bottom line,” he said.
In addition to the other cost-saving measures, Atlantic sold the 70 Ashenheim Road, Kingston premises it formerly occupied, having determined it wasn’t sufficient for an expanding operation.
“It was not consistent with our thinking as it relates to growth. We basically were operating out of about 70 containers and two buildings, and they were all discrete locations. At times we had to load a truck and then drive down the other side of the road,” Barnes explained.
The company’s base is now at Marcus Garvey Drive in the industrial belt.
“We are all covered primarily at 105 to 107 Marcus Garvey Drive, where we have close to 50,000 square feet of building, all covered. We’re able to lay out our products; we’re able to employ first-in, first-out methodologies in terms of stock management,” Barnes said.
Atlantic Hardware’s growth plans does not include a foray into the retail hardware market. It will maintain its 30-year tradition of being a hardware wholesaler, he said.
Atlantic Plumbing listed on the JSE junior market four months ago in April. Its market value at midweek was $2.18 billion or 87 cents per share.
English (US) ·