DURBAN - Jasco Electronics' poor performance is attributed to a number of once-off costs and impairments related to goodwill in Power & Renewables and the closure of the operations in East Africa and the Middle East.
It shaved 26.67percent off the share price on Friday after the group reported a loss of R19.38million in its results for the year ending in June, compared to a profit of R3.38m reported last year.
Jasco said it experienced a difficult second half in tough economic conditions, and management also implemented a number of corrective actions which exacerbated negative impact.
“Restructuring and closures were implemented to address under-
performance in certain businesses. This resulted in the closure of three regional offices and the retrenchment of half the technical resources in Security, Fire and Technical Services. The Carrier Solutions business was also restructured in the last quarter, with the remaining business incorporated in Webb Industries under one management team,” the group said.
Jasco delivers technologies across Information and Communication Technology (ICT), security, fire, power and renewables. It closed the Middle East office in December last year and contractual obligations were closed out in the second half, without significant costs being incurred, and disposed its East Africa operation in Kenya. In the results, revenue was flat at R1.14billion and operating profit declined by 71.90percent to R11.35m, down from R40.39m compared to last year.
Jasco's loss a share widened to 12.9cents a share, compared to 3.3c the previous year, while headline loss increased to R24.2m compared to R3.4m reported a year ago. Its headline loss a share came in at 10.7c, widening from 1.5c. As a result, the group did not declare a dividend during the period because of its financial position.
Looking ahead the group said the economic outlook for financial year 2020 remains very challenging. However, management will remain focused on executing its strategic goals, which include stabilising the balance sheet and reducing debt.
“The priority is to further reduce the corporate bond and working capital loan over the next financial year from the expected cash generation due to higher profitability levels from the business units. The board has reviewed the target gearing ratios and maintained the maximum level of long-term debt target at 50 percent of equity,” the group said.
Jasco shares closed at 22c on the JSE on Friday.