Going gets tough again for Jasco Electronics
The electronics company has warned shareholders of a sharp fall in earnings for the year to end-June
Jasco Electronics issued a surprise profit warning on Friday, months after a multimillion rand deal that was expected to fatten its margins failed to materialise.
The company, which provides solutions across the telecommunications, IT, energy and industrials sector, said on Friday that it expected to report headline earnings 38% to 48% lower for the year to June. This translates into 3.3c to 3.9c a share, compared with 6.3c previously.
The company blamed this on adverse trading conditions in SA, where there was low economic growth and a volatile rand during the year.
“These market conditions particularly impacted the second half of the financial year,” it said.
The conditions resulted in a revenue contraction of between 1% and 5%.
The R52.3m deal struck in March to acquire fire-detection firm Cross Fire Management was unsuccessful after the Competition Commission blocked it. Jasco listed the transaction costs arising from the deal as one of various one-off items that affected its results.
“The profit warning was a bit unexpected but includes a number of once-off expenses that materially distort the results,” said Keith McLachlan, portfolio manager at AlphaWealth.
“Overall, the key is that the group’s revenue is 1% to 5% lower and this is a symptom of the soft GDP environment in SA,” he said.