Jasco boosts revenue, but takes a profit knock

·17 Sep 2015

Listed ICT group Jasco has reported an 8% increase in revenue for the year ended 30 June 2015, to R1.1 billion, but impairments eat away at operational profit.

However, due to impairments from the disposal of its presence in M-TEC, the company posted an overall operational loss of R72.5 million, down from an operating profit of R17.6 million the year before.

According to Jasco, however, the good news is that 2015 marks the end of the company’s three-year restructuring plan, which included the exit from M-TEC, which dragged on the group’s past results.

“We look forward to a period post M-TEC where the management can give its undivided attention on Jasco’s core business,” it said.

To indicate “pure” operating performance, the group outlined adjusted operating profit, which excludes impairments and adjustments.

Adjusted operating profit improved by 9% from R26,3 million in 2014 to R28,6 million, mainly due to the higher sales volumes and increase in gross margins from 28.4% to 29.1%.

Headline earnings of R5,1 million increased by 429% (2014: R1,0 million) and headline earnings per share (HEPS) was up 324% to 2,4 cents per share (2014: 0,6 cents per share).

Prospects

According to Jasco, the ICT industry is expected to continue to consolidate in both operator and supplier environments.

Despite this, the group expects an increase in demand for services, which will counter any decreasing margins.

The group also sees further growth in its intelligent technologies unit, its newest business – while its business enterprise unit is on “the watch list” to ensure a return to profitability.

To counter the challenging economic and market conditions Jasco said it will continue to focus on its exit from M-TEC and keep with its expansion into Africa.