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South Africa: Profit Rises At Beefed-Up Jasco
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Business Day (Johannesburg)
9 May 2008
Posted to the web 9 May 2008
Bheki Mpofu
Johannesburg
TELECOMS equipment and electronics group Jasco's strategy to grow organically and through acquisitions continues to bear fruit, with the company reporting strong results yesterday .
JSE-listed Jasco (JSC) said revenue for the year ended February grew to R519,2m, up 28% from last year, translating to a 29% increase in headline earnings per share. Operating profit rose 25% to R49,5m compared with the corresponding period last year.
Organic growth accounted for 16% of the group's total revenue for the year, while 12% consisted of new acquisitions, Jasco said.
Telecommunications remained the largest division, contributing 54% to revenue, although that was lower than the 59% recorded last year. Domestic products and security contributed 27% and 18% respectively.
"This year marks the delivery on all aspects of our strategy," CEO Martin Lotz said. "Four years ago, we committed to the core strategy of growing acquisitively and organically and of ensuring a diversified group with strong growth areas.
"Over the years, we have delivered consistent growth, with a 27% increase in revenue and a 44% increase in earnings per share over the past three years."
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But the results reflected a dilution to earnings per share and headline earnings per share, arising as a result of Jasco's black economic empowerment deal concluded with Community Investment Holdings (CIH).
Last month, Jasco concluded the acquisition of a 34% stake in cable group M-TEC for R214,1m from CIH and sold a 34,9% stake in Jasco to empowerment investment group AfroCentric for R99m. The deal also saw CIH acquire a 34% stake in AfroCentric and retain a 24% direct stake in Jasco.
"The transactions mark a transition from a black-controlled to a black-owned company," Lotz said.
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