The Rapid TrueValue store at Lane Plaza, on Constant Spring Road, Kingston. - File

Hardware and Lumber Limited, trading as Rapid TrueValue, has doubled profits in its third quarter to further hasten its recovery after two years of depressed income.

The retail company, which is 58 per cent owned by conglomerate GraceKennedy, made $30 million at the end of September, or 37 cents per share, compared to $14 million or 18 cents per share in the matching 2006 period.

Its nine month results were even more impressive. Revenues grew by just under $170 million to $4.8 billion, while profits rose 12-fold from $4.9 million to $61 million.

Still, while the company's margins also improved, the ratio of profit to sales remained unimpres-sive at 1.3 per cent - or just over one cent retained per dollar of sales made - while operating margin was slightly better at 3.3 per cent.

The company's stock has also been depressed and is now trading at a one-year low of $13, pulling its stock market value down to $1.05 billion from a year's high of $1.45 billion or $18 per share.

Improvements in the company's performance are expected into the fourth quarter, which is usually H&L's top earnings season.

The chain's biggest money spinner remained household items, which topped $3 billion of sales, but the strongest revenue growth was in hardware which climbed 57 per cent to $955.5 million.

The latter segment retained pole position as largest contributor to operating profit, accounting for 45 per cent of business.

During the last quarter, the company added the Ralph Lauren line of paints, which it acquired the rights to distribute. It's inventory tracking system to match stock on the shelves with real time demand by shoppers will not come on stream until 2008, said CEO Anthony Holness in a statement to shareholders.

GraceKennedy, which invested US$1.4 million in the system's procurement, had initially projected November for full installation.

business@gleanerjm.com

TAKEN FROM THE FINANCIAL GLEANER, FRIDAY, NOVEMBER 9, 2007