JASCO ELECTRONICS HOLDINGS LIMITED - Trading Statement

Trading Statement

JASCO ELECTRONICS HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration Number 1987/003293/06
Share code: JSC     ISIN: ZAE000003794
(“Jasco” or “the company” or “the group”)



TRADING STATEMENT

Jasco is in the final year of its three-year restructuring
programme. During the last six months to 31 December 2013, the
majority of the group’s operational businesses, with the
exception of the Security business, performed solidly.
The ICT-Carrier business unit delivered a strong profit
performance through a combination of improved efficiencies and
the positive impact of the disposal of Telecom Structures
which took place in the second half of F2013. In ICT–Networks
and ICT-Enterprise the focus on revenue growth and cost
containment remains on track. As communicated to shareholders
previously, corrective action was implemented in the Security
business unit within the Energy & Industry vertical, which
resulted in the overhead cost base being aligned to revenue.
In contrast, the Electrical Manufacturers business unit, also
part of the Energy and Industry vertical, grew profits
strongly in the interim period. It also exited the automotive
sector post the interim period end.


At a group level, the three-year restructuring programme is
drawing to a close. The company anticipates that the ongoing
restructuring costs incurred to date will only continue until
the end of the next quarter. Overall improvements in working
capital reduced the group’s interest cost during the interim
period.


Jasco therefore advises that, for the six months ended 31
December 2013, the company expects:
   •   Earnings per share (“EPS”) to be between 47% and 57%
       lower (between 4,3 cents and 5,4 cents per share) than
       the 10,1 cents per share for the previous corresponding
       period. The reduction in this reporting period is
       primarily due to the results of the previous
       corresponding period to December 2012 incorporating the
       profit on the disposal of the Midrand property and the
       loss on disposal of Lighting Structures.
   •    Headline earnings per share (“HEPS”) to be between 0%
        and 10% higher (between 5,0 cents and 5,5 cents per
        share) than the 5,0 cents per share for the six months
        to December 2012.

The only difference between EPS and HEPS in the current
reporting period is a loss on disposal of fixed assets in the
normal course of activities.


The weighted average number of shares in issue of 141 272 436
compares to 141 077 161 and has not materially impacted the
comparison of EPS or HEPS to the previous corresponding
period.


M-TEC


The group has a 51% shareholding in its associate M-TEC, with
Taihan Electric Wire Co. Limited (“Taihan”) of Korea holding
the remaining 49% interest. As advised at the June 2013 year-
end, this investment is categorised as “Held-for-sale” for
IFRS reporting purposes. Accordingly, Jasco has stopped equity
accounting this investment in its consolidated accounts. The
performance from M-TEC has therefore had no impact on the
earnings reported for the current interim period. The company
withdrew its cautionary announcement relating to the sale of
M-TEC on 20 December 2013 due to protracted delays in the
negotiations   following  unexpected   management  changes  at
Taihan. Jasco’s strategy remains to exit this business. The
Directors will continue to discuss the most appropriate next
steps at the Board meeting to be held in February 2014.


Rights issue
The group’s rights offer was successfully concluded on 21
January 2014, whereby R57,6 million was raised for the group,
before related costs of R2,6 million. The rights offer has
also introduced a new strategic shareholder to the group. This
partner brings potential cross-selling business and technical
alliance opportunities to Jasco.


Conclusion

Although the current period was still impacted by
restructuring costs, the improvement in the group’s earnings
quality in the last year of restructuring is gratifying. The
execution of Jasco’s growth strategy continues and the new
base set will allow for the delivery of quality earnings and
ensure the sustainability of the core businesses.


The information in this trading statement has not been
reviewed or reported on by the Company’s external auditors.

Shareholders are advised that Jasco’s unaudited interim
results will be announced on 18 February 2014.


Johannesburg
24 January 2014


Sponsor
Grindrod Bank Limited

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