Jasco retracts full-year payout

In a highly unusual turn of events Jasco Electronics has withdrawn a full-year dividend it had previously declared.

On September 27 Jasco, an investment holding company for a group of firms in the telecommunications and manufacturing sector, declared a 1c=per-share dividend in the results for the year to June 30.

The firm retracted the results on October 1 and asked the JSE to suspend its shares after it had erroneously referred to provisional results as “audited”. According to a timeline released with the previous results, the dividend would have been paid on October 22.

In the retracted results, Jasco said the dividend had been paid out of income reserves. But it changed its tune on Monday in the restated financials, saying “due to earnings loss position of the group, the board deemed it prudent not to declare a dividend this year”.

“As we started working with new external auditors, PwC Inc, this year, certain accounting changes were required, including applying a different IFRS standard in one particular case, which required restatements. We regret any inconvenience caused to our stakeholders,” said Jasco CEO Mark van Vuuren.

“As a group we have an unwavering commitment to being a responsible corporate citizen and there was never any intention to make materially false or misleading statements when we first announced our provisional results on 27 September.” He said the company would ask the JSE to lift the suspension of its shares after the release of the restated results.

In the year ended June 30 Jasco’s earnings loss reduced by 80%, from a loss of R39.2m in June 2017 to R7.7m. Earnings loss per share also narrowed 80% from the previous 17.3c per share to 3.3c per share, while headline loss per share reduced by 69% to 1.5c per share.

The company increased revenue by 10% to R1.2bn. Jasco’s net cash in the bank position decreased from R95.6m to R67.9m. Jasco attributed the financial performance to, among other things, the lack of organic growth in the SA market, project delays in the Middle East, exchange rate volatility and lower margins from Jasco Electrical Manufacturers unit.

Van Vuuren, who joined the company in July 2018, said his priorities were improving earnings, turning around underperforming businesses and reducing costs. He replaced Pete Da Silva, who stepped down after seven years at the helm.