Jasco Electronics has reported that its revenue rose 7% to R557,2-million for the six months ended 31 December 2017.
Operating profit was down 1% to R29,9-million, and earnings per share (EPS) dropped 68% to 2 cents per share.
The drop in profit before interest and taxation (PBIT) mainly due to the R5,8-million drop in Intelligent Technologies, R1,5-million higher than expected losses in Kenya, R3,6-million
unrealised foreign exchange loss in December and a R4,6-million cost increase attributable to IT, training, acquisition-related consulting activities and non-deductible VAT.
This was offset somewhat by the first-time six-month profit contribution from Reflex Solutions of R12,5-million, and a good performance from Electrical Manufacturers which was up R1-million on improved margins.
The Carrier business — representing 32% of group revenue — was slightly down at the revenue level as the major telecommunications operators continued to cut costs. It remains the biggest profit contributor to the group, with operating profit performance up marginally.
Enterprise — representing 37% of group revenue — made progress in improving its profitability with Communications and Security reversing the prior loss position to a breakeven for the first half. The recently-acquired Reflex Solutions made a strong top- and bottom-line contribution for a full six-month period.
Intelligent Technologies — representing 12% of group revenue — delivered a disappointing performance, with a drop in revenue and operating profit. This was mainly in the energy sector due to difficult market conditions.
Electrical Manufacturers — representing 19% of group revenue — delivered steady top-line growth mainly due to its diversification strategy. New customers added to volumes and led to a pleasing operating profit growth.
In the start-up International businesses, Kenyan operations did not deliver on volume expectations due to the socio-political situation, which resulted in curtailed customer demand in 2017.
The business in the Middle East did not gain the traction expected in the last six months due to the group declining to accept three new projects due to commercial terms not being acceptable. Due to the lack of business, substantial cost cutting was undertaken late in the period.
A number of key internal initiatives are underway, including: creating scale through bolt-on acquisitions; raising capital in the equity market; reducing debt; improving operating margins and performance; working capital management; and transformation.