Shares in JSE-listed Jasco declined 20% yesterday after it warned headline earnings per share would drop by between 83% and 93%, mostly due to strike action last year.
Jasco, which will report its first set of financials after wrapping up its three-year restructuring plan, says the month-long metalworkers strike in July has "negatively' affected its operations.
In reaction, shareholders moved almost half a million shares, leading to a 20% decline in the value of the company's stock as it closed at 60c, a 15c downward move on the day. Jasco's market capitalisation is now R131 million.
Jasco says it spent the first half of the year focusing on recovering sales volumes it lost in the businesses worst affected by the strike, as well as on continuing to cut costs. The listed company adds market conditions, as in the second half of the previous year, were challenging, with "some key customer orders delayed and increased competition in the market".
For the first six months of the year, to December, earnings per share are expected to drop by between 82% and 92%, moving to between 0.4c and 0.9c compared with the 4.9c it reported a year ago.
Headline earnings per share, seen by analysts as a key performance indicator, will drop by between 83% and 93% to between 0.4c and 0.9c. In the six months to December 2013, this measure came in at 5.3c.
Jasco, which will report its interims on 16 February, said a year ago it was getting ready for growth opportunities, after tidying up the company structure and sorting out its balance sheet. In the six months to December 2013, 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.
For the second half of this year, it will focus on continuing to recover volumes lost due to the strike, and adds it is committed to selling out of M-TEC, a move that has been on the cards for some time. Jasco notes the "full impact of the restructure will start flowing through from 2015".
Jasco has a 51% stake in M-TEC, with Korean Taihan Electric Wire Company holding the balance.
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