Jasco’s headline earnings per share (Heps) spiked by 783% year on year to 5.7c in the six months ended December 31 2015, signalling a strong turnaround in the fortunes of the technology group.
Operating profit surged by 290% to R30.1 million on the back of an 11% improvement in revenue to R558.1 million.
The huge improvement in Heps came in spite of Jasco issuing 10.9 million new shares in April 2015, which had a 5% dilutionary impact on Heps.
“The operational performance of the group improved significantly from the comparative period, against difficult market conditions, with all businesses contributing to profits,” Jasco said in a statement accompanying the interim results.
“This pleasing performance was largely driven by a strong order book and prudent cost management. The carrier and intelligent technologies businesses — representing 58% of the group’s revenue — delivered gratifying results and management’s focus on the enterprise business resulted in its return to profitability.”
Cash generated from operations (before working capital outflow of R15 million) more than doubled to R39.1 million.
“Management’s priority is to reduce debt on receipt of the proceeds from the sale of [subsidiary] M-TEC. This, together with the improved cash generation expected from the operations going forward, will allow the group to substantially reduce its gearing profile,” it said.
Gearing — the ratio of its debt to the value of its shares — improved from 73.3% at June 2015 to 64.8% at the end of the year. It now expects the gearing ratio to fall below 50%.
CEO Pete da Silva said Jasco has focused on driving sales — with its order book up by 24% from December 2014 — and on cost cutting, which led to 6% in cost savings.
But he warned the outlook for the economy has deteriorated. “The dramatic volatility of the rate of exchange has made trading more difficult, with the full impact not experienced yet,” Da Silva said.
The recent interest rate hikes by the South African Reserve Bank will see a further tightening of growth in 2016. Against this market context, we will continue to execute against our strategy and focus on continuing to grow our regional and African footprint and adding new products and services to our portfolio.”
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