JSE-listed Jasco has integrated Spescom and restructured its operating units, setting each a defined minimum target.
The company yesterday reported its results for the year to June and said revenue grew 38%, to R773 million. Stripping out Spescom, which it bought towards the end of last year for R55.8 million, revenue would only have grown 7%.
However, the company incurred several once-off costs relating to the acquisition, including R3.5 million as a result of the transaction, and R6.9 million once-off merger restructuring costs, which was the result of merging the entities.
Jasco says it has stripped out R9.7 million from its future cost base by flattening the organisational structure and restructuring the business. Savings have come from eliminating duplicated senior executive positions, direct listing costs such as non-executive directors, annual reports and professional services fees.
Pete da Silva, presiding over his first results presentation since taking over from former CEO Martin Lotz in July, says the restructuring was necessary because “Jasco was an alphabet soup of a company”.
Jasco's three divisions are now: ICT Solutions, Industry Solutions and Energy Solutions. Previously, its four operating entities were: Telecommunications, Security, Domestic Products and Electrical.
Da Silva says Spescom has been combined with its telecommunications businesses and renamed to ICT Solutions. He explains the company's old brands have fallen away, with the exception of some instances in which product names are used.
Targeted growth
The company has set minimum targets for each of its units of revenue of R350 million within two to three years. Each business entity within its three verticals must achieve turnover of R150 million in the same time frame, says Da Silva.
Its ICT unit, which now comprises a carrier and enterprise division, beat the minimum targets as it turned over R800 million. Da Silva says Jasco did not previously have a full enterprise offering, and the Spescom acquisition allows the company to move into this space.
Da Silva says industry solutions will move into building automation and energy efficiency, cross-selling its ICT solutions. He says the unit will make small, bolt-on acquisitions to drive revenue growth.
Having fully integrated Spescom, Jasco now has scalability and the ability to cross-sell more products across all its units, which previously operated as silos, says Da Silva.
Energy Solutions is expected to benefit from government's move to allow independent power producers into the sector, says Da Silva.
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