Jasco's R55.8 million buyout of Spescom last year has weighed on its earnings for the year to June, despite a positive contribution from its new subsidiary.
Jasco says in a trading update to shareholders, issued yesterday, that it incurred several once-off costs relating to its buyout of Spescom, which a first time earnings contribution of R4.6 million did not fully offset.
The listed company says earnings per share for the year to June will be between 5.7c and 9.6c, which is a decline of between 50% and 70%. Headline earnings per share are anticipated to be between 11.6c and 14.9c, a decline of between 10% and 30%.
Jasco says the lower earnings are mostly due to a R31.9 million impairment of cable manufacturer M-TEC, a fair value gain of R31.7 million as a result of the Spescom acquisition, once-off transaction costs of R3.5 million, restructuring costs of R6.9 million, and impairment of two Spescom trade names of R4.4 million.
Stripping out the effects of the Spescom deal, earnings per share would be between 18.5c and 21.8c, or a 10% to 30% improvement. Headline earnings per share would have gained between 15% and 35%, to between 19.1c and 22.4c.
“The rest of the business delivered mixed performances when compared to the year ended June 2010,” says Jasco.
Its largest division, telecommunications, has improved since last year, although the last six months of the year saw a slowdown, says Jasco. Security was a bit lower than the previous year, while its domestic products unit showed a “healthy” improvement.
Jasco's electrical division continued to be impacted by a poor performance from its M-TEC associate, which is performing lower than expected.
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