Electronics group Jasco had spent the first half of the current financial year on recovering the lost sales volumes after a month-long strike in the metals and engineering sector shaved R5.8-million from the group’s profit before interest and taxes (PBIT).
The JSE-listed group, which had just concluded a three-year restructuring programme, on Monday posted a 40% decline in PBIT to R7.7-million for the six months to December 31, from R12.8-million in the comparative period the year before.
Excluding the impact of the strike, Jasco said its PBIT would have been 5% higher.
Jasco’s headline earnings and headline earnings a share for the period under review plunged by 82% and 88% respectively to R1.4-million and 0.7c a share, with earnings a share also down 88% to 0.6c from the 5.1c reported in the prior corresponding period.
Group profit before interest and taxes decreased by 40%, from R12.8-million in the six months to December 2013, to R7.7-million in the six months to December 2014, while profit for the year fell 73.6% to R1.95-million.
Group revenue reached R502.3-million in the first half of the year, a 5.3% decline on the R530.4-million achieved in the prior corresponding period.
Jasco’s Carriers division, which boasted 35.5% of group revenue, reported a 3.4% decline in revenue to R179.9-million, owing to the strike action and the ongoing slowdown in spend by the major telecommunications operators on expected consolidation within this sector.
The unit’s operating profit decreased by 13.4% to R18.9-million.
The Enterprise division, accounting for 33.7% of group revenue, also recorded a decline in revenue, from R190-million in the prior comparative period, to R170.8-million in the first half of the current financial year, owing to a delayed R20.8-million, which was subsequently received in January 2015.
The unit’s operating profit swung into the red with a loss of R1.6-million in the interim period to December 2014, compared with a R3.7-million profit the year before.
During the period under review, Jasco’s Electrical Manufacturers business – the most severely impacted by the strike action with R9.1-million in lost sales volumes – saw a 18.1% decline in revenue to R81.8-million, with a 53.8% drop in operating profit to R5.6-million.
The Intelligent Technologies unit, however, reported a 19.2% hike in revenue to R73.9-million owing to “good growth” in the power solutions division offsetting a pedestrian performance from the broadcast solutions division.
The operating profit of R3.3-million was up 997% on the comparative period owing to the volume increase in the power solutions business and the elimination of losses in the managed solutions business.
Meanwhile, Jasco assured that the full impact of the restructure would emerge in the 2015 financial year, with the company’s short-term focus narrowed to the delivery of profitable results enabled by the more efficient group structure.
Key activities for the year ahead included the recovery of the volumes lost during the strike; exiting low value-adding manufacturing sectors and any noncore businesses; dealing with the underperforming Enterprise business; continuing expansion in Africa; further developing the annuity business; and continuing to increase the range of products and services sold to existing customers as part of cross-selling activities.
The group would also target large corporate and public entities with a focus on energy optimisation and improve gross margins through a group strategic procurement initiative and extracting greater efficiency from productive heads.