Jasco republishes results, retracts dividend
Jasco Electronics has republished its audited results for the year ended 30 June 2018 and retracted a previous dividend declared.
On 1 October, the group voluntarily suspended trading in its shares on the Johannesburg Stock Exchange (JSE) and withdrew its financial results published on 27 September, saying it had erroneously referred to the results being 'audited results' instead of 'provisional results'.
In the previous set of results, Jasco's board declared a dividend of 1cps, which would have been paid to shareholders on 22 October, but the dividend had to be withdrawn due to the retraction of the full-year results.
At the time, CFO Warren Prinsloo told ITWeb in a telephonic interview the group was not expecting any changes to earnings or operating profit when the results were released again.
The re-release today showed no change to revenue, which was up 10% to R1.15 billion. However, operating profit did change from the previous R53.7 million stated to R40.4 million, while the previous year's operating profit was re-stated down to R3.9 million, after previously reporting it at R41.9 million in the 27 September results release.
The group said it started working with new auditor, PwC, this year, which resulted in a number of aspects of the results being interpreted differently in accordance with International Financial Reporting Standards (IFRS). This led to a number of re-statements.
In the first results announcement, the group said earnings were 9% higher at R8.8 million, but now reported its earnings loss had reduced by 80% to R7.7 million, re-stating last year's earnings as a loss of R39.2 million.
Headline earnings per share (HEPS) were also now reported as a headline loss per share of 1.5cps, a reduction of 69% on the re-stated loss of 4.8cps for the previous year. In the previous announcement, the group had reported an HEPS increase of 8% to a positive 2.7cps compared the HEPS of 2.5cps in 2017.
The company says "there was never any intention to make materially false and/or misleading statements", and that, following the publishing of these audited results, it will apply to the JSE for the lifting of the voluntary suspension of its shares.
"It is important to note that, excluding these once-off adjustments, the group continued to deliver at an operational level, with a strong operating profit improvement," it said in the new results statement.
Profit for the year before tax was up 270% to R16.1 million and earnings before interest, tax, depreciation and amortisation increased by 51% to R75.5 million.
However, "due to the earnings loss position of the group, the board deemed it prudent not to declare a dividend this year".
Jasco said the tough economic conditions in SA continued to prevail, which "exacerbated the ongoing volatility of the rate of exchange on the back of emerging market weakness".
"These factors presented significant challenges to the group."
The group said the main achievements during the year included continued good operating performance from the carrier business, contributing R53.7 million to operating profit; ongoing customer diversification in electrical manufacturers, with volumes from new customers contributing to the revenue growth; and operating profit growth from broadcast solutions in intelligent technologies on completion of large projects.
It also saw first-time profit contributions from newly acquired RAMM Technologies, which were in line with expectations, and saw good operating profit contribution from the acquisition of Reflex Solutions for 12 months.
"The biggest disappointment was the delay in issuing the June 2018 Integrated Annual Report and related announcements of financial results and suspension of the security on the Johannesburg Securities Exchange."
The group said other disappointments included a continued lack of organic growth in the South African market, where the carriers business was negatively impacted; lower revenue in East Africa due to the uncertain political environment from national elections, which resulted in low business confidence; and a lack of progress in the Middle East, which resulted in the closure of the UAE office in favour of only project-based work.
The group also felt an ongoing margin squeeze in its electrical manufacturers segment due to pressure from its major customer. It reported an operating loss by Datavoice in its enterprise division, due to the delay of projects in the Middle East, which it says have materialised post year-end. Power and renewables in intelligent technologies also saw an operating loss because of lower sales volumes; however, restructuring has been completed in this segment and costs reduced.
New CEO Mark van Vuuren took over in July 2018, replacing Pete da Silva, who had been at the helm for seven years.