The electronics company aims to grow its telecommunications division into Africa, and bolster it by adding security products to the mix.
Jasco's results yesterday were impacted by a slow down in spend in the telecommunications space, with both fixed-line and African wireless projects being put on hold.
CEO Martin Lotz, addressing shareholders at the company's presentation, says wireless roll-out, which makes up 89% of the unit's revenue, was slower in the six months to December. Fixed-line spend was at its lowest levels ever, and now only makes up 11% of the division's revenue, down from 20% previously.
The company has four business units, including security, domestic products, electronics and telecommunications. Telecommunications is the company's biggest driver of revenue, at 44% of total revenue of R264 million.
“Telecommunications was one of the last industries to feel the pinch, but large companies like Telkom and Ericsson have cut capital expenditure.”
Hopeful
Despite the slowdown in projects, Lotz is confident the unit will start picking up soon. He expects continued pressure for the next six months, as only essential spending such as around the World Cup infrastructure is carried out.
data communications, he notes.
In SA, the company is confident of playing in the network access space as Seacom's capability needs to be brought inland. Maringo, a start-up in the convergence space that lost R380 000 in the past six months, should also be profitable by year-end, says Lotz.
Expanding
Growing telecommunications is a key priority for Jasco, and forms part of its strategic five-year plan.
One way the company will grow the unit is to “take telecommunications and security solutions and integrate them into value-add products to take to the market,” says Lotz. The security division provides full turn solutions in electronic security systems, including design, supply, installations and maintenance.
Lotz says the division will expand its offerings to include CCTV, access control, fire protection, energy management and high-end solutions to the mining industry.
In addition to adding to the range of products that telecommunications provides, the business unit will expand into selected African countries such as Mozambique and Ghana, says Lotz. Jasco also aims to add to its communications value chain through acquisition.
Chris Gilmour, an analyst with Absa Investments, says Jasco's long-term fundamentals are solid. He adds that companies that Jasco supplies, such as Telkom, will need to spend to bolster infrastructure.
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