Jasco losses narrow after layoffs and sales of non-performing businesses
Technology group took a R163m revenue hit from the pandemic and has breached loan covenants
Technology group Jasco Electronics says it has narrowed losses in the six months to end-December 2020 after cutting costs by retrenching staff and selling non-performing businesses.
Jasco, which has interests that include providing transmission and operational support systems for telecoms networks across Southern Africa, took a R163m revenue hit from the pandemic towards the end of its financial year and has breached its loan covenants.
On Tuesday, the company reported revenue of R351.3m from continuing operations for the period, 16% lower compared with R416.9m previously, mainly due to the ongoing effect of the Covid-19- related lockdowns.
Profit before interest and taxation from continuing operations improved to R1.9m from a R6.2m loss previously. The company said this was mainly “due to significant cost savings across the group” that were offset by a R14m decrease in profit by its Datavoice business.
Earnings per share increased from a 6c loss to a 4.1c profit. Headline earnings per share — a measure that strips out the effects of one-off financial events — for the period improved from a 5.2c loss to a loss of 1.5c.
The company said the difference between earnings and headline earnings for the year relates to a loss on the disposal of fixed assets and profit on the loss of control of ICT business Reflex Solutions.
Last year, Jasco reached an agreement to dispose of its controlling stake in Reflex Solutions in a R76m transaction. This is still to be approved by shareholders at a meeting set for April 21.
Jasco, which acquired a 51% interest in Reflex in May 2017, said “the disposal transaction is well advanced”.
Jasco under the management of recently appointed CEO Warren Prinsloo is focused on managing its debt and containing losses.
The company told shareholders its primary focus in the short term will remain on “delivering sustained profits and addressing the optimal way to recapitalise the group”.
It said it will achieve this by reducing its financial gearing through a combination of the Reflex disposal proceeds and cash generated by Jasco’s operations; and adding new products and services to the company’s portfolio.
Shares in Jasco, up 33% so far this year, remained unchanged at 20c on Tuesday, giving the company a R46m market capitalisation.
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