Restructuring process at Jasco Electronics to counter uncertainty

JSE-LISTED Jasco Electronics has put non-performing segments of its business under the restructure notice in order to return them to profitability in the second half of the financial year.

The segments that formed part of the restructure, implemented at the beginning of February, are Security and Fire and Energy segments. Chief executive Mark van Vuuren said the process of restructure is currently under way and will be completed in the second half of the financial year.

“In a fast-changing technology environment, the business context is changing at an increasing pace. Customer requirements are becoming more difficult to predict, with increased market uncertainty as customers face disruptive new business models due to rapid technology advancements.

“To counter this uncertainty, we will continue to execute our strategy and concentrate on improved sustainable profitability levels in all business units, reducing financial gearing and pursuing revenue and margin improvements in fast-growing areas of smart enterprise infrastructure, fifth-generation network infrastructure, open access network infrastructure and Internet of things,” Van Vuuren said.

Despite going through the process of restructuring, the group still managed to report a 248 percent increase in headline earnings per share to 1.3 cents a share for the six months to end December, improving on headline loss per share of 0.9c compared to last year.

Jasco said it will continue to invest in technology going forward.

In the results earnings before interest tax, depreciation and amortisation increased by 40 percent to R44.2 million while revenue increased by 3.8 percent to R576.7m.

Operating profit before interest and taxation improved by 46 percent to R26m, with net operating margin increasing to 4.5 percent.

Van Vuuren said the delivered a strong improvement in tough economic conditions.

“We are very conscious of having to be agile and ensuring the group is innovative and differentiated in these demanding markets. We have a clear strategy of shifting from a product development, distributor and reseller model to that of a systems integrator and service provider of choice for our target customer base through the provision of smart infrastructure solutions,” he said.

The group added that to deliver on this, they have a relevant portfolio, broad industry experience and understanding of the priorities of the different markets and stakeholders.

“We re-organised our business units during this period to increase focus and enhance the group’s alignment to key markets,” Van Vuuren added.

The share price remained flat on the JSE on Friday at 25c.