Jasco is getting out of low-cost manufacturing and investing in areas it considers to be the "new economy", such as integration and managed services.
This comes after last year's month-long metalworkers' strike severally hampered its bottom line, costing it R5.8 million in profit before interest and tax for the six months to December. Without the strike, profit before interest and tax would have gained 5% year-on-year, but instead dropped 40% to R7.7 million.
CEO Pete da Silva anticipates future strikes having less of an impact on the company, which had just moved out of its three-year restructuring period when the industrial action took place. He explains Jasco is divesting its low-cost manufacturing units, which will limit the effect of further strikes.
During the restructuring phase, Jasco sold non-core businesses such as its lighting and telecoms structures unit, and the automotive business. It has since further refined its structure, incorporating business units that did not turn over at least R150 million into other businesses in the stable.
This affected ICT Networks, Security Solutions and Power Solutions, which now form part of two larger business units. Jasco now comprises a carrier leg, an enterprise segment, intelligent technologies and its electrical manufacturers unit.
Da Silva says Jasco needs to diversify further and has registered an office in Kenya and is starting to trade in Nairobi. Initially, the company is offering contact centre and unified communications solutions, but this will eventually expand to become a "mini-me of Jasco in East Africa", he adds.
So far, the East African operations are growing well and are ahead of budget, says Da Silva.
Da Silva adds Jasco will in future become an integrator and managed services provider. He notes its recent bond placement, of R750 million, gives it access to cash so it can invest at short notice, although he does not anticipate using the full facility.
Jasco's shares closed 14% higher, to 73c, despite the adverse effect of the strike on its bottom line.
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