Jasco wants to own all of its businesses

Jasco Electronics plans to buy out minority shareholders in its subsidiaries to boost profits, says CEO Pete da Silva.

Jasco said on Monday that total comprehensive income for the six months to December fell 28.7% to R10.7m, as profits payable to minority shareholders leapt to R6.5m from R1.1m a year before.

The group owns 51% of information and communications technology (ICT) business Reflex Solutions, two-thirds of data centre company NewTelco SA and 51% of a small fire security group.

“One of the strategic objectives that we’re addressing now is that we want to own 100% of our businesses,” Da Silva said.

Reflex Solutions had generated far higher revenues than expected in the interim period.

Discussions with minority shareholders of the three businesses “are quite well advanced”, he said.

Meanwhile, Da Silva said Jasco aimed to grow business in East Africa, even as political upheaval in Kenya led to higherthan-expected losses in the country. “We still believe that market is the right one, specifically … the integration and ICT and technology space.

“We are going to be a bit headstrong, we are not going to allow six or 12 months to make us change our minds [about that market],” Da Silva said.

Jasco, which entered the market on its own shortly before the Kenyan elections, had brought in local partners to improve its network there.

Da Silva conceded that it would probably have been easier to enter the Kenyan market through an acquisition or partnership. “This is why we have brought some local partners in with some equity holding, because they know the lie of the land better than we do.

“We are possibly going to change our strategy there,” Da Silva said, although “we won’t buy something for the sake of buying”.

Da Silva said Jasco would also “reassess the viability” of Jasco’s base in the United Arab Emirates (UAE) and surrounding markets in the Middle East and North Africa.

Jasco has a 40% stake in a Dubai-based business, although competition in the UAE was heavy, he said.

“What we are finding is there are quite a few more opportunities in the surrounding countries, for instance, the likes of Lebanon, Oman and Bahrain.”

Jasco was considering moving its base from Dubai or doing more project work from the city into surrounding countries.