| Tue 16 Oct 2001, 0:00 | | Jasco: Unaudited Results For The Six Months Ended |
|
Jasco Electronics Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/003293/06)
Share code: JSC ISIN: ZAE000003794
("Jasco")
Unaudited results for the six months ended 31 August 2001
SUMMARISED INCOME STATEMENTS
Unaudited Audited
6 months ended year ended
31 August 28
February
2001 2000 2001
R'000 R'000 R'000
Revenues 164 447 213 532 417 380
- from continuing operations 91 414 69 536 148 812
- from discontinued operations 73 033 143 996 268 568
Operating profit/(loss) before: 6 907 1 009 (12 147)
- Depreciation (1 856) (2 295) (4 739)
- Net interest paid (3 363) (3 406) (7 544)
- Dividends received - 2 449 5 076
Operating profit/(loss) 1 688 (2 243) (19 354)
- from continuing operations 2 747 (748) (11 186)
- from discontinued operations (1 059) (1 495) (8 168)
- Exceptional items (337) - (98 114)
Net profit/(loss) before taxation 1 351 (2 243) (117 468)
Taxation - - -
Net profit/(loss) after taxation 1 351 (2 243) (117 468)
Outside shareholders' interest (159) (299) (1 017)
Net profit/(loss) attributable to
ordinary shareholders 1 192 (2 542) (118 485)
Headline earnings adjustment 337 - 98 114
Headline earnings/(loss) 1 529 (2 542) (20 371)
Headline earnings adjustment/
exceptional items
Trademarks written-off - - (56 481)
Loan to Share Trust written-off - - (8 500)
Amortisation and impairment
of goodwill (5 725) - (22 047)
Provision for losses in
discontinued operations - - (10 818)
Loss on disposal of business
operations (1 803) - (268)
Profit on sale of subsidiary 7 191 - -
Total exceptional items (337) - (98 114)
Number of shares in issue ('000) 47 177 47 177 47 177
Number of shares on which
earnings per share is
calculated ('000) 47 177 47 177 47 177
Number of shares on which
diluted earnings per share
is calculated ('000) 48 812 48 812 48 812
Earnings/(Loss) per share (cents) 2,5 (5,4) (251,1)
Diluted earnings/(loss)
per share (cents) 2,4 (5,2) (242,7)
Headline earnings/(loss)
per share (cents) 3,2 (5,4) (43,2)
Diluted headline earnings/(loss)
per share (cents) 3,1 (5,2) (41,7)
Net asset value per share (cents) 42,4 198,8 44,8
Notes:
This interim report was prepared using accounting policies which are in
accordance with AC 127, Interim Financial Reporting. These policies are
consistent with those applied in the financial statements for the year ended
28 February 2001.
ABRIDGED CONSOLIDATED BALANCE SHEETs
Unaudited Unaudited Audited
31 August 31 August 28 February
2001 2000 2001
R'000 R'000 R'000
ASSETS
Non-current assets 27 954 83 278 37 272
Plant and equipment 7 683 10 890 10 947
Intangibles 13 490 19 215
Unlisted investments - 51 500 -
Loans 6 781 20 888 7 110
Current assets 87 966 171 083 153 037
Total assets 115 920 254 361 190 309
EQUITY AND LIABILITIES
Equity and minority interest 19 980 96 014 24 057
Ordinary share capital and
reserves 19 980 93 787 21 112
Outside shareholders' interest - 2 227 2 945
Non-current liabilities 478 2 673 1 463
Interest bearing liabilities 478 2 673 1 463
Current liabilities 95 462 155 674 164 789
Interest bearing liabilities 50 576 82 955 71 169
Non-interest bearing liabilities 44 886 72 719 93 620
Total equity and liabilities 115 920 254 361 190 309
Statements of changes in equity
Opening balance 21 112 96 329 96 329
Prior year adjustment - - 41 262
Foreign currency translation reserve (2 324) - 2 006
Attributable profit/(loss) 1 192 (2 542) (118 485)
19 980 93 787 21 112
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2001 2000 2001
R'000 R'000 R'000
Cash generated from/(utilised in)
operations 13 085 (28 664) (20 850)
Net financing costs (3 363) (3 406) (7 544)
Net dividends received - 2 449 4 634
Taxation recouped - - 105
Cash flow from operating activities 9 722 (29 621) (23 655)
Cash flow from investing activities 12 693 365 (959)
Cash flow from financing activities (1 173) (3 846) 1 507
decrease/(Increase) in
interest bearing current liabilities 21 242 (33 102) (23 107)
COMMENTS
Jasco has been restored to profitability. The turnaround from last year's
disastrous results stems from the implementation of our strategy to exit the
high volume, low margin businesses and to focus on higher margin business
and sound asset management.
The businesses which we are exiting, but which have not yet been sold or
completely shut down, are referred to as "discontinued operations". The
elimination of discontinued operations is taking longer than anticipated and
losses sustained in those businesses dented earnings during the reporting
period. However, as the process of exiting those operations is being well
managed, further losses will be minimised and should not have a significant
further effect on earnings for the full year.
The substantial improvement in profit from continuing operations and the
reduction in borrowings are particularly pleasing.
RESULTS
The implementation of our new strategy resulted in Group turnover declining
by 23% to R164,4 million (R213,5 million). However, Group operating profit,
before interest and depreciation, rose to R6,9 million (compared to R1,0
million last year).
Turnover from continuing operations increased by 31% to R91,4 million (R69,5
million) while operating profit from those operations rose to R2,7 million
(loss of R0,7 million last year).
Discontinued operations produced a loss of R1,1 million (a 29% reduction on
last year's loss of R1,5 million).
Group headline earnings amounted to R1,5 million (last year loss R2,5
million) and headline earnings per share amounted to 3,2 cents for the six-
month period.
Manufacturing, voice and image divisions all produced good results. Our
network build division won important local contracts as well as contracts in
Rwanda and Botswana, all of which are currently in progress. This division
traded at a loss during the first half but is expected to contribute to
group profits for the year as a whole. Our recently established telesciences
division is not yet profitable but has been short-listed for tenders
potentially worth over R100 million.
DISCONTINUED OPERATIONS
The bulk of the turnover from discontinued operations is attributable to our
Middle East data distribution business, On Line Distribution, which, as
previously published, was sold with effect from 1 July 2001. The initial
proceeds (R13 million net) were banked to reduce borrowings. The balance of
up to US$1.4 million will be paid in April 2002, subject to the achievement
of certain profit targets.
In addition, we disposed of a small operation (Fibertail) to Tank Industries
(Pty) Limited for a net R1,3 million. The remaining business in the category
of discontinued operations is the data distribution business, Technology
Junction, which has been sharply scaled down and whilst still trading at a
loss, contributed some R4 million towards the reduction in borrowings
through the collection of debtors and the disposal of excess stock.
PROSPECTS
The core voice, manufacturing and image divisions are expected to continue
producing satisfactory results, while the network build division is expected
to begin contributing to profits during the second half of the year.
Discontinued operations are expected to continue trading at a small loss and
our newly established telesciences division is also expected to operate at a
small loss until an order is received from one of the many tenders for which
it has been short listed.
Whilst there has been a substantial reduction in borrowings during the first
half of the year and the Group is trading satisfactorily within the current
facilities granted by our bankers, gearing is still high. All the operating
divisions, other than telesciences, are expected to continue generating cash
and this will result in a further reduction in Group borrowings during the
second half of the year.
The reduction in borrowings will be further enhanced if and when we receive
the additional payment in April 2002 for the sale of On Line Distribution.
As indicated above, this payment is conditional on the achievement of
stipulated profit targets. If the full profit target is not achieved, Jasco
will receive a pro-rated proportion of the balance due. The management team
of that business currently forecast that they will achieve target. However,
given the current uncertainty in that region, we are not placing reliance on
this potential source of cash and profits.
Management expect that profits in the second half of the year will exceed
those earned in the first half of the year and expect that there will be
further improvement in the Group balance sheet.
BLACK ECONOMIC EMPOWERMENT (BEE)
Our BEE initiatives are implemented through Khululeka Telecommunications
(Pty) Ltd (which is controlled by our black partners) and through Jasco
Telesciences (Pty) Ltd and Metato Telecommunications (Pty) Ltd which are
also black-controlled companies.
Khululeka has successfully tendered for contracts valued at over R10 million
and is awaiting adjudication on a number of additional tenders. Jasco
Telesciences and Metato have also submitted tenders which are currently
awaiting adjudication.
DIVIDENDS
As previously stated, the directors still believe that is in the best
interest of the shareholders to conserve cash. Accordingly, no interim
dividend has been declared.
DIRECTORATE
Dr Joel Matsipa has joined the board as a non-executive director with effect
from 3 October 2001.
STRATE
The dematerialisation date for Jasco securities was Monday, 4th June 2001
and electronic settlements of Jasco trades commenced on Monday, 25th June
2001. Shareholders are reminded that Jasco securities must now be in an
electronic form before they may be traded on the JSE Securities Exchange
South Africa.
On behalf of the board
T B Rutstein Dr S H Robertson M H Lotz
(Chairman) (Chief Executive Officer) (Financial Director)
Woodmead
16 October 2001
