Jasco Electronics posts 98 per cent drop in HEPS due to sell off of businesses

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Jasco Electronics posts 98 per cent drop in HEPS due to sell off of businesses South Africa’s ICT sector lacking critical skills. PHOTOS: Getty Images/Magicalmaths.org

The company, which specialises in innovative solutions for sectors such as ICT (infomration and communications technology), industry and energy in Sub-Saharan Africa, stated that the drop in earnings is attributed to the strategi exit of thee key businesses within the group. 

“Jasco is at the end of year two of its three-year restructuring programme. The group has made good progress, with the current year’s focus being on corrective action. This resulted in decisive action in the underperforming areas of the business, which impacted the results for the year to 30 June 2013” said the JAsco group[DATA JSC:JASCO ELECTRONICS HOLDINGS LIMITED.] in a statement released on Wednesday.

Lighting Structures and Telecommunications Structures was sold to Singapore based LeBlanc International in December 2012 and July 2013 respectively.

The third company, Malesela Taihan Electric Cable (M-Tec), a nonferrous products manufacturer, is currently “held for sale”.

Impairments and loss on sale of all three assets totalled to 123 million rand.

Profit before interest and taxation (PBIT) decreased from a profit of 32.1 million rand in 2012 to a loss of 93.5 million rand this year, which the group have stated were above their expectations.

Revenue however rose 16.3 per cent from 990 million rand in 2012 to 1.15 billion rand in 2013.

Plans for 2014 will see the group structured into two rather than three verticals, which is said to be in line with their final year of their three year restructuring programme.

One will be the ICT vertical which will contain three of their businesses- Carrier Solutions, Enterprise Solutions and Network Solutions.

The other vertical will see the divisions of Energy and Industry being combined to create the Energy and Industry vertical, which will contain Security Solutions, Power Solutions and Electrical Manufacturers.

In the ICT Carrier Business, the group expects short term market growth due to the LTE (4G) network rollout and broadband wireless connectivity demands.

In Networks and enterprise, increasing demand for cloud solutions should be expected despite the pressure on corporate spend.

“Jasco expects continued market share gains with new technology developments, particularly in building coverage solutions. Growth in annuity revenue in both Networks and Enterprise will continue, although at a slower rate off the higher base set in 2013,” said the statement.

“During the year, the decisive action on non-performing areas has positioned the new core business base for growth. In the first half of 2014, further restructuring costs will impact results, with the second half to show an improvement. The full benefits of the three-year restructuring programme will be seen from 2015.”