JSE-listed Jasco has wrapped up year one of its three-year turnaround strategy, and ended the 12 months to June with revenue 28% higher, at R990 million, as new orders bolster the company.
CEO Pete da Silva says the restructuring and a bid to cross-sell instead of having the units in silos is starting to pay off. He says it is pleasing to see the teams sharing for bigger gains. Da Silva took over as CEO, about a year ago, from Martin Lotz.
"We have achieved what we set out to do in the first year of our three-year strategy implementation process. The benefits of operating as an integrated group, with clear verticals focused on targeted customer segments, have already started to kick in."
Da Silva adds that sales improved through the start of cross-selling initiatives and the group has seen R25 million in new orders from four businesses working together during the year. Its annuity-based revenue increased from R400 000 to R2.1 million a month, he notes.
Jasco has been restructured into three verticals: Information and Communication Technology (ICT) Solutions, Industry Solutions and Energy Solutions. Previously, the group had four units.
ICT Solutions contains the telecommunications and information technology businesses of Jasco, Spescom, the newly-acquired ARC Telecoms, as well as the telecommunications arm of associate M-TEC. Industry Solutions contains the security business and recently-acquired FerroTech, with Energy Solutions containing Electrical Manufacturers and Lighting Structures, as well as the energy arm of M-TEC.
Protecting the bottom line
Da Silva says the group started its three-year journey last year, and has reaped several efficiencies. However, the company has also incurred expenses as part of the turnaround. Da Silva says Jasco protected headline and earnings per share.
Earnings per share were 100.6% higher, at 15.6c, while headline earnings per share came in at 16.8c, a 20.3% gain on last year.
Jasco's new structure has allowed for efficiencies such as removing several management positions and de-registering certain legal entities that have become superfluous. The cost base at head office has been trimmed almost 20% and more savings are set to be extracted, such as lower staff costs after right-sizing and trimmed compliance expenses.
Da Silva says there is still more work to be done, such as in its infrastructure business, which is battling with environment impact assessments and the recent trend towards tower sharing in the cellular space.
The company's shares closed 1.91% lower at 154c yesterday.
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