| Mon 19 Sep 2011, 13:09 | | JSC - Jasco Electronics Holdings Limited - Trading statement |
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JSC
JSC
JSC - Jasco Electronics Holdings Limited - Trading statement
JASCO ELECTRONICS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1987/003293/06)
Share Code: JSC ISIN: ZAE000003794
("Jasco" or "the Company" or "the Group")
Trading statement
Jasco wishes to advise shareholders that due to the acquisition of
Spescom Limited and its subsidiaries ("Spescom") on 15 December 2010,
this trading statement provides earnings and headline earnings guidance
to Jasco shareholders by including and excluding Spescom and the related
acquisition and restructuring costs, in order to provide Jasco
shareholders with a more meaningful comparison.
The Company believes a like-for-like comparison excluding the first time
effects of the acquisition of Spescom and the related once off
acquisition and restructuring costs is the most meaningful for
shareholders. Refer to Like-for-like comparison excluding Spescom and
related acquisition and restructuring costs further down the trading
statement.
Including Spescom and related acquisition and restructuring costs
Accordingly shareholders are advised that:
* Earnings per share ("EPS") for the year ended 30 June 2011 is
expected to be between 5.7 cents and 9.6 cents or between 50% and
70% lower than the 19.1 cents EPS reported for the year ended 30
June 2010.
* Headline earnings per share ("HEPS") for the year ended 30 June 2011
is expected to be between 11.6 cents and 14.9 cents or between 10%
and 30% lower than the 16.6 cents HEPS reported for the year ended
30 June 2010.
The net decrease in earnings was primarily due to:
* The R31,9 million impairment of associate M-TEC`s carrying value.
* The fair value gain of R31,7 million which arose on the acquisition
of Spescom on 15 December 2010.
* The impairment of two Spescom trade names of R4,4 million at 30 June
2011.
* The fair value loss of R2,8 million on disposal of the associate
interest in Maringo on 1 January 2011.
* Once-off transaction costs of R3,5 million associated with the
Spescom acquisition and once-off restructuring costs of R6,9 million
directly associated with the merger of the combined Group. The first time
earnings contribution of R4,6 million for the six months by Spescom is in
line with our expectations but did not fully compensate for the once-off
costs.
The rest of the business delivered mixed performances when compared to
the year ended June 2010. Telecommunications, the largest division,
experienced a pleasing improvement on last year but saw a slower
performance in the last six months. The Security division was somewhat
lower than last year but remained stable during the second half of the
year. The Domestic Products division experienced a healthy improvement on
last year and an exceptional second half with good earnings growth on
solid volumes from the new Snapper brand of products.
The performance in the Electrical division continued to be impacted by
the poor performance from the group`s associate M-TEC. This business
continued to underperform against the Group`s expectations set at the
time of the acquisition at the top of the economic cycle in 2008.
Management has concluded that the more prudent view taken in December
2010 was appropriate, and that the impairment of R31,9 million in the
carrying value of the investment is adequate.
Like-for-like comparison excluding Spescom and related acquisition and
restructuring costs
As outlined above, the Company believes a like-for-like comparison
excluding the first time effects of the acquisition of Spescom and the
related once-off acquisition and restructuring costs is more meaningful
for shareholders. Refer to the table below for more information*.
Shareholders are advised that on this like-for-like basis:
* Pro forma like-for-like EPS for the year ended 30 June 2011 is
expected to be between 18.5 cents and 21.8 cents or between 10% and
30% higher than the core EPS of 16.8 cents per share for the year
ended 30 June 2010.
* Pro forma like-for-like HEPS for the comparative pro forma year
ended 30 June 2011 is expected to be between 19.1 cents and 22.4
cents or between 15% and 35% higher than the actual HEPS of 16.6
cents per share for the year ended 30 June 2010.
The core EPS of 16.8 cents has been calculated by excluding from the
reported earnings for year ended 30 June 2010, the following adjustments
(which were disclosed in the 30 June 2010 audited annual financial
statements):
- impairment of associate M-TEC`s carrying value of R21,5 million; and
- the fair value gain on the disposal of a joint venture of R24,1
million.
*Unaudited pro forma information
The table below illustrates the unaudited pro forma like-for-like EPS and
unaudited pro forma like-for-like HEPS for the year ended 30 June 2011
(the "pro forma information").
The unaudited pro forma information which has been prepared by, and is
the responsibility of the directors of Jasco, has been prepared for
illustrative purposes only to show the effect of excluding the
acquisition of Spescom and the related acquisition and restructuring
costs from the actual results of the Group for the year ended 30 June
2011. Accordingly, due to the nature thereof, the pro forma information
may not be a fair reflection of the Group`s results of operations or the
effect on the future earnings of Jasco.
Actual Pro forma % Change.
30 June 2011 30 June 2011
Before(1,2,5 After
) (1,3,4,5)
(cents) (cents)
Earnings per share 5.7 to 9.6 18.5 to 21.8 225%-127%
Headline earnings per 11.6 to 14.9 19.1 to 22.4 65%-50%
share
Weighted number of 126 302 111 557 12%
shares (`000)(4)
Notes:
1. The unaudited pro forma financial information is based on the
accounting policies adopted by the Company and is in accordance
with International Financial Reporting Standards.
2. The "Actual Before" column is based on the unaudited EPS and
HEPS for the year ended 30 June 2011 as disclosed in this
trading statement, which have been extracted from the unaudited
management accounts of the Group.
3. The "Pro forma After" column reflects the unaudited pro forma
like-for-like EPS and like-for-like HEPS after excluding from
the actual results of the Group for the year ended 30 June
2011:
a. the once-off acquisition costs of R3,5 million (post
tax),
b. the once-off merger restructure costs of R6,9 million
(post-tax),
c. the first time six month earnings contribution by
Spescom of R4,6 million (post-tax).
d. all headline earnings adjustments.
These adjustments have been extracted from the unaudited
management accounts of the Group for the year ended 30 June
2011.
4. The Company is satisfied with the quality of the unaudited
management accounts from which the pro forma adjustments made
to EPS and HEPS contained in this trading statement, have been
derived.
5. The calculation of EPS and HEPS is based on the weighted
average number of ordinary shares in issue less the treasury
shares and reflects the weighted adjustment to reverse the
issue of 31 889 901 new Jasco ordinary shares that were issued
on 24 January 2011 pursuant to the acquisition of Spescom.
The information in this trading statement has not been reviewed or
reported on by the Company`s external auditors.
Shareholders are advised that Jasco`s audited provisional results will be
announced on or about 27 September 2011.
Johannesburg
19 September 2011
Sponsor
Grindrod Bank Limited
Date: 19/09/2011 13:09:01 Produced by the JSE SENS Department.
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