Jasco in massive interim profit boost
Listed technology company Jasco on Wednesday reported an 11% jump in group revenue to R558.1 million, for the six months ended December 2015.
Group profit before interest and taxation (PBIT) increased by 290% to R30.1 million from R7.7 million in December 2014.
Headline earnings per share (HEPS) increased by 783% to 5.74 cents per share.
Jasco’s CEO, Pete da Silva, said that the company has focused on driving sales, with the order book up 24% from December 2014, while a focus on cost cutting resulted in 6% cost savings.
“The majority of our businesses delivered strong results, with all businesses now profitable, including the previously under-performing Enterprise,” he said.
Financial highlights
- Earnings per share (EPS) was similarly up by 810% to 5.73 cents per share (Dec 2014: 0.63 cents per share)
- The weighted average number of shares in issue increased from 213.3 million shares to 224.2 million shares following the general issue of 10.9 million shares in April 2015 to the investor in the group’s corporate bond. This increase in the number of shares had a 5% dilutionary impact on EPS and HEPS
- The statement of cash flows reflects an improvement of 106.3% in cash generated from operations before working capital flows of R39.1 million compared to R18.9 million in December 2014
- Working capital flows reflect an outflow of R15 million (December 2014: R3.4 million inflow). This outflow related to the increase in accounts receivable and inventory levels in the Carrier and Intelligent Technologies businesses on the higher first half volumes
“Enterprise is now profitable after strong action taken, but we will focus on the execution of large projects to achieve the required revenue. We remain focused on improving working capital.
“During the first six months, the main drive was on volume and profitability in the Carrier business, which necessitated a greater investment in working capital. This investment will translate into cash inflows in the second half,” da Silva said.
Commenting on the outlook, he said: “The South African economic and market conditions have deteriorated dramatically in recent months. The dramatic volatility of the rate of exchange has made trading more difficult, with the full impact not experienced yet. The recent interest rate hikes by the South African Reserve Bank will see a further tightening of growth in 2016.”
The chief executive said that against this market context, the company will focus on continuing to grow it’s regional and African footprint and adding new products and services to the portfolio.
Carrier – 40% of group revenue
Revenue increased by 26.0% to R226.7 million, mainly due to an increase in spend by the major telecommunications operators on growing demand for data services.
This resulted in operating profit increasing by 66.6% to R31.5 million at an operating margin of 13.9% (December 2014: 10.5%).
Enterprise – 27% of group revenue
Revenue for the year decreased by 11.3% to R151.4 million due to the delay of two major projects into the second half of the financial year. The annuity revenue base was maintained at 25%.
The operating profit was a profit of R1.7 million from a loss of R1.6 million at December 2014. The operating margin improved from a negative 0.9% to a positive 1.1% due to significant savings in the cost base, offsetting the impact of the lower sales volumes.
Intelligent technologies – 18% of group revenue
Revenue increased by 38.5% to R102.3 million, due to the good growth in the Power Solutions and Broadcast Solutions businesses. The operating profit of R9.5 million (Dec 2014: R3.3 million) was significantly up in line with the volume increase and good cost control.
The operating margin of 9.3% improved from 4.5% last year.
Electrical manufacturers – 15% of group revenue
Electrical Manufacturers experienced flat revenue at R82 million on a slowdown in spend from large appliance manufacturers.
The last six months saw a continued focus on diversifying the revenue base, with the largest customer now below 70% of the business unit’s revenue (Dec 2014: 72%).
The operating profit of R6,3 million increased from R5.6 million on improved gross margins and tight cost control. The operating margin therefore increased from 6.8% to 7.7%.
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