Johannesburg - Jasco, which is celebrating its 40th birthday, has reinstated its dividend as its bottom line shows its restructuring is paying off.
The company on Monday published its results for the year to June and said revenue lost 4 percent to R1 billion, because of lower volumes caused by the depressed economic climate. However, profit before income tax gained 158 percent to R41.7 million. A year ago, the company had made a loss.
It said headline earnings per share – a key measure of profitability – grew 164 percent to 6.3c a share.
Jasco also declared a dividend of 2c a share, after 4 years of no dividends.
In its commentary, it said its results were characterised by a strong first half and a much weaker second half on the sharp downturn in the local economy in 2016, with the volatile exchange rate impacting the group negatively.
Despite the lower sales volumes in the second half, the overall result for the financial year was pleasing, with the restructured business proving its defensive capability, with all business units contributing to profits, it says.
Jasco says it has reduced long-term debt and improved its gearing ratio from 73 percent to 54 percent, and improved financial stability at several of its business units.
Jasco notes it is currently focused on reducing debt, improving profitability of its enterprise unit and improving working capital management.
CEO Pete da Silva says “South Africa as a country had one of the most challenging years, which resulted in extremely tough trading conditions. This was even more pronounced in the second half of the year.”
Da Silva adds “Jasco is in a more stable position now, with an improvement in the quality of earnings and cash generation. The current economic climate is unfortunately expected to prevail throughout 2017, which is set to impact the first half of the year.
“To weather these conditions, we will continue to execute our strategy and focus on a number of key areas over the next six to 18 months.
“We will maintain our focus on costs and ensure a return to acceptable and sustainable profitability levels in the enterprise business, reduce financial gearing to less than 50 percent, continue our geographic expansion and carefully evaluate bolt-on acquisitions to ensure smaller businesses achieve the required critical mass.”
IOL