Jasco sees profits fall amid restructure
While Jasco Electronic Holdings reported an 11.8% rise in revenue to R552.1 million for the six months ended December 2012‚ its operating profit before interest and tax declined 7.6% to R19 million as the group proceeds with its re-positioning programme.
Jasco recorded a 27.1% decline in diluted headline earnrings per share to 5.0 cents, from 6.9 cents in 2011.
The group said its core businesses improved their performance; however, adverse market conditions severely impacted the performance of Lighting Structures and Telecom Structures, as well as the groups associate, M-TEC, which reduced overall group profitability.
With effect from 1 December 2012, Lighting Structures was sold to Jasco’s international partner in this business for R2.1 million. Telecom Structures was restructured and the investment in M-TEC is under review, it said.
The group’s operating profit decreased by 8% to R19 million, and was impacted by two once-off events, namely an R8.8 million profit on the disposal of its head office property, and a R4.4 million loss on the disposal of Lighting Structures.
ICT
ICT Carrier Solutions, which represents 48% of group consolidated revenue increased earnings by 25% to R292.4 million.
Telecoms Structures experienced significant market changes which included site sharing by major mobile operators and a slowdown in infrastructure roll-out. The business model was changed to accommodate these impacts. The restructure was completed during the period, Jasco said.
ICT Carrier won orders from five new blue-chip groups. Consolidated operating profit of R20.9 million was however, flat, largely due to investment in the voice and data annuity connectivity business.
Restructure
The Jasco group is halfway through its three-year repositioning programme. Phase one‚ the re-grouping of Jasco into three focused verticals‚ is complete‚ with the benefits of operating as an integrated group starting to flow through.
Phase two‚ which focuses on increasing customer centricity‚ is currently rolling out. The group’s sales initiatives have already improved through a focused performance and delivery culture and the cross-selling initiatives delivering early successes.
Looking ahead‚ the group said it continues to strive for increased market share in the ICT Solutions vertical‚ with a focus on new customer acquisition and an increased share of wallet with existing customers.
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