Jasco Electronics has posted an operating profit increase of 132% for the six months ended 31 December 2020.
Cash generated from operations increased by 218%, earnings per share increased by 168% and headline earnings per share were up by 70%.
During the period, the group implemented a new and more efficient operating structure and executed a group leadership and succession plan.
The disposal of Reflex Solutions is on track, with a shareholders’ meeting set for 21 April 2021.
The first half of the 2021 financial year continued to be affected by the impact of Covid-19 on Jasco’s customers and the general South African
economy. Although the group’s revenue improved in the last six months, it was still lower than the comparative six-month period to 31 December 2019.
However, the operating profit before interest and taxation improved from losses for the comparative six months to 31 December 2019 and for the year-end to 30 June 2020 to a profit for the six months to 31 December 2020.
The new group structure took effect from 1 November 2020.
The group recently appointed a permanent CEO and chief financial officer (CFO). The new head office team and the restructured divisional teams with fewer management members will also result in lower head office costs and divisional overheads.
The group posted revenue of R351,3-million from continuing operations was 16% lower (December 2019: R416,9-million), mainly due to the ongoing effect of the Covid-19 related lockdowns.
Profit before interest and taxation from continuing operations improved to a profit of R1,9-million (December 2019: R6,2-million loss). This was due to significant cost savings across the group, which were somewhat offset by a R14-million decrease in profit by Datavoice in Communication Solutions.
Reflex’s revenue was R70,9-million for the two-months and 20 days it was still included in the Jasco results (December 2019: R128,3-million for the full six months). Its operating profit contribution decreased by 45% to R6,6-million for the two-months and 20-day period compared to R12,1-million for the six months to December 2019. Included in the discontinued operation’s operating profit line is the R12,7-million net profit arising from the loss in control of Reflex.
Jasco’s earnings per share (EPS) increased from a 6.0 cents per share loss to a profit of 4.1 cents per share. Headline earnings per share improved from a loss of 5.2 cents per share to a loss of 1.5 cents per share.
The statement of cash flows reflects cash generated from operations before working capital changes of R34,3-million compared to R27,9-million in December 2019. Working capital changes reflect an outflow of R5,5-million (December 2019: R18,8 million outflow).
The closing cash balance of R31,7-million increased from R21,3-million in June 2020 and from R28,7-million in December 2019.
Jasco relinquished control of Reflex Solutions (Reflex) on 20 September 2020. The loss in control gave rise to a profit of R14,7 million to Jasco during the period, with the investment being equity-accounted from 20 September 2020.
The results of Reflex are separately disclosed as a discontinued operation for the current and prior reporting periods.