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

Introduction

Jasco has concluded the final year of its three-year
restructuring programme, with revenue growing from R800
million to over R1 billion per year over the last three years
and annuity income growing by over 100%. Although group
revenue has exceeded the R1 billion target set at the start,
market conditions remained tough over the three-year period.

As indicated at interim stage, planned final restructuring
costs impacted negatively on earnings. Nevertheless, the
results are a marked improvement on the previous financial
year, largely due to the non-recurrence of once-off items in
that year. However markets remained depressed during the
second half of the financial year to 30 June 2014. This,
together with stiff competition to maintain market share and
customer orders delayed into the new financial year, impacted
negatively   in  the  period.  The  Electrical  Manufacturers
business, which delivered a very strong performance, was the
notable exception.

In line with previously set targets, the group continued to
reduce overheads, including further relocations of certain
businesses to Jasco’s Midrand head office. Further management
layers were removed in line with our productivity measures,
which resulted in the consolidation of some businesses.

Against these market conditions, Jasco therefore advises that,
for the year ended 30 June 2014, the company expects:
   •   Earnings per share (“EPS”) to be between 100% and 110%
       higher (between 0,0 cents and 7,8 cents per share)
       compared to the 77,9 cents loss per share for the
       previous financial year, where once-off costs of R114
       million were incurred
   •   Headline earnings per share (“HEPS”) to be between 45%
       and 55% higher (between 0,4 cents and 0,6 cents per
       share) than the 0,3 cents per share for the previous
       year.

The difference between EPS and HEPS in the current reporting
period is:
    • The profit on disposal of the Automotive business to
      Lumen of R4,3m and
    • a R0,2m profit on disposal of fixed assets in the normal
      course of activities


The weighted average number of shares in issue for the year
increased from 141 272 436 to 172 831 580.  An additional 72
million shares were issued in the rights issue of 21 January
2014. This has materially impacted the comparison of EPS or
HEPS to the previous financial year.


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 previously, the
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 financial year. Negotiations
to sell the group’s stake in M-TEC continue.


Conclusion


Although the 2014 financial year continued to be impacted by
planned restructuring costs and very difficult market
conditions, the three-year programme is now complete and the
sound execution of Jasco’s strategy continues. The new cost
base, the more efficient group structure, and the
sustainability of the core businesses - after exiting various
non-core assets - indicate that the group is now better
positioned to face the prevailing market conditions and to
deliver results.


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 audited abridged results
will be announced on 17 September 2014.


Midrand
29 August 2014
Sponsor
Grindrod Bank Limited

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