Feb 06, 2012
Jasco says Spescom integration, restructuring starting to bear fruitBack
Energy Solutions|Enterprise Applications|Ferro Resistant Technologies|ICT SOLUTIONS|Industry Solutions|Spescom|Cable Manufacturer|Capital Management|Communication Technology|Communications Technology|Pete Da Silva|Communications Technology|Information Technology
© Reuse this
The company reported 75% profit growth in the six months ended December 31, rising to R11.88-million, from R6.79-million a year earlier.
Following the combination of Jasco and Spescom, group revenue increased by 55% to R493.9-million, compared with R313.4-million in 2010, while operating profit increased by 30% to R20.6-million, from R15.9-million in the previous year.
Da Silva stated that this was mainly owing to the improvement in the group’s largest consolidated contributor, the ICT solutions vertical, as well as once off costs falling to R1.2-million from R4.2-million in the previous comparative period.
Meanwhile, headline earnings a share were up 96% to 6.9c a share, compared with 3.5c a share in the 2010 period, with earnings a share rising by 130% to 6.4c a share from 2.8c a share in 2010. The weighted average number of shares in issue increased from 116.5-million to 140.8-million shares.
“We are satisfied with the results, which indicate the benefits of our restructuring and a renewed focus on driving performance,” Da Silva noted.
The company had reinvigorated the organisation by creating a unified brand with a dedicated customer focus, flattening the organisational structure and reducing its cost base by R8-million a year.
“Although it is not the end of the road, we have delivered on our objectives so far, with positive feedback from customers, a stronger brand recognition and cross-selling across the group gaining traction,” he said.
Da Silva added that the company’s focus over the next six months would continue to be on ensuring sustainable performance at M-Tec and addressing underperformance at its product development house Enterprise Applications, while extracting further cost savings and improving working capital management.
“The benefits of operating as an integrated group, with clear verticals focused on targeted customer segments, have only started to kick in, with the medium- and longer-term outlook positive and several strategic opportunities in the short term. Further cost savings are set to be extracted from the business, such as the benefits from rightsizing and the impact of merged businesses and lower compliance and other costs,” he noted.
Further, the group’s bolt-on acquisition plan was reported to be on schedule, without sacrificing focus on organic growth and addressing problem areas in the business.
“We remain committed to ensuring earnings enhancement through both organic and acquisitive growth, while improving the return on equity on a sustainable basis,” Da Silva added.
To ensure a more integrated business development focus, the group was restructured last year under one Jasco brand into three verticals, namely, ICT Solutions, Industry Solutions and Energy Solutions.
ICT Solutions contains the telecommunications and information technology businesses of Jasco and Spescom, as well as the telecommunications arm of associate M-Tec. Industry Solutions contains Jasco’s previous security business and the recently acquired power and energy solutions company Ferro Resistant Technologies, while Energy Solutions contains Jasco’s previous domestic products division, Lighting Structures and M-Tec’s electrical arm.
Da Silva said the group would continue growing its market share in the mature carrier space, a vertical from which it has already experienced increased orders from current and new clients owing to a more focused sales offering.
On the enterprise side, the benefits of a lower cost base owing to rightsizing in a tough market would flow through in the second half of the financial year, with the aim to extract value from those customers where spend is taking place.
The high level of annuity income in the company’s ICT solution Enterprise Communication through ongoing service level agreements was expected to continue to provide some protection in the medium term.
Further, the Energy Solutions vertical would continue to drive its strategy of bolt-on acquisitions to position Jasco as a tier-two solutions provider in transmission, distribution and balance of plant business.
Looking at new horizons, Da Silva said the company was also turning its focus to the mining sector.
“We have completed Jasco’s entry into the fire solution market and want to diversify into the mining sector. We will use our fire detection and power solutions as a way into the mining sector and have started marketing in this regard,” he enthused.
Edited by: Mariaan Webb© Reuse this Comment Guidelines
Other Video News
Updated 6 hours ago Outgoing Eskom CEO Brian Dames reported on Tuesday that the utility was considering restarting some of the energy-saving programmes that were suspended in late 2013 as a result of funding constraints. Speaking at a briefing hosted by the South African Chamber of...
Updated 7 hours ago Six out of ten respondents in a survey conducted by Rand Merchant Bank (RMB) and the Bureau for Economic Research (BER) were unhappy with prevailing business conditions, the RMB/BER first quarter Business Confidence Index (BCI) has shown. The BCI fell by two points...
Updated 7 hours ago The Eastern Cape Department of Economic Development, Environmental Affairs and Tourism (DEDEAT) and Nelson Mandela Metropolitan University’s (NMMU’s) said this week that their baseline study on shale gas aimed to put to bed evident uncertainties as South Africa...
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
Creamer Media’s Electricity 2014 report provides insight into South Africa’s electricity generation, exploring the issues of State-owned power utility Eskom's generated power, coal supplies, electricity tariffs and demand-focused initiatives, as well as the...
This month’s report includes details of junior miner Papillon Resources’ mining permit for its flagship Fekola gold project, in Mali; the Waterberg Coal Company’s feasibility on the development of an opencast mine, in Limpopo, to produce ten-million tonnes a...
A structured approach, wherein managers personally engage at each level of the project, is necessary to mitigate delays to the workflow on mega construction projects, says State-owned Eskom Kusile power station projects GM Abram Masango. The 4 800 MW Kusile power...
Construction of transmission lines to evacuate power from a regional hydroelectric project in East Africa, which was hanging on the balance following the withdrawal of financing by key partners, is now back on track. After six months of uncertainty, the African...
Three Memorandums of Understanding (MoUs) were signed between South African and Malaysian companies at the Malaysian High Commission in Pretoria on Friday. These MoUs are part of the indirect offsets programme South Africa is providing in return for Malaysia’s...