Jasco, which is heading into the final six months of its turnaround strategy, is getting ready for growth opportunities, after tidying up the company structure and sorting out its balance sheet.
During the first half of the final restructuring year, most of the group's operational businesses, with the exception of the security unit, performed solidly, it says. It has also met several milestones, including a unified brand and a R55 million rights offer.
CEO Pete da Silva says it has been a hard slog over the past two-and-a-half years, but the new shoots are starting to come through. "It's nearly spring time, even though we are going into autumn."
Da Silva says some of the businesses are six months ahead of schedule and the restructuring is already starting to pay dividends. "I'm glad it's coming together."
The results of the work can be seen in Jasco's interim results, which were published yesterday, says Da Silva. In the six months to December, the listed company saw revenue decline slightly, coming in 3.9% lower, at R530.4 million, but its core operating profit gained 2%, to R21.2 million.
This figure strips out restructuring costs and last year's once-off net gain on the disposal of a property.
Cash improvement
Jasco's cash flow has also improved after the group focused on trimming working capital and collecting against the debtors' book.
Total cash inflows from operating activities came in at R8.8 million, compared to the prior first half's R800 000 outflow. Da Silva says Jasco has spent the last six months focusing on its balance sheet and cleaning up inefficiencies.
Tidying up the balance sheet is expected to take about another two to three months, and then the company will look at growth opportunities, says Da Silva. Jasco aims to grow its market share in ICT, where it does not have a substantial share, he notes.
Da Silva adds the group will also seek to grow its power unit, and fix its perimeter security business, which is on his watch list. He says the company has now been regrouped into two verticals, from the previous three, and can benefit from management efficiencies and cross-selling opportunities.
From the start of the current financial year, Jasco now has an ICT Solutions business, and merged its separate Industry Solutions and Energy Solutions into one to create the E&I Solutions vertical. This contains electrical manufacturers, security and power.
Jasco has been selling off non-core companies and keeping a close eye on underperformers. Part of Da Silva's remedy for its security unit was to move it to Midrand, where its ICT business is based, as there are cross-selling opportunities. "I expect a lot of water-cooler talk. You can't have 'skinner' corners when one's in Boksburg and the other in Midrand."
The listed company is also looking for small built-on acquisitions, joint ventures and alliances. Da Silva says there are a few opportunities on the table, but he will not make a move unless this benefits the bottom line.
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