Jasco interim results December 2018
Revenue for the interim period increased by 3.8% to R576.7 million (2017: R555.5 million), operating profit before interest and taxation rose by 45.6% to R26 million (2017: R17.8 million). Profit attributable to equity holders of the parent came to R2.9 million (2017: loss of R6.6 million). Furthermore, headline earnings per share was recorded at 1.3 cents per share (2017: headline loss per share of 0.9 cents per share).
As outlined, the group continues to operate against difficult economic and market conditions in all its markets. The extreme exchange rate volatility in South Africa also resulted in a more challenging trading environment. The risk of a credit ratings downgrade of South Africa's sovereign debt by the major credit ratings agencies is high and the forthcoming general elections is contributing to market uncertainty. Additionally, in a fast-changing technology environment, the business context is changing at an increasing pace. Customer requirements are becoming more difficult to predict, with increased market uncertainty as customers face disruptive new business models due to rapid technology advancements in areas such as Internet of Things (IoT), big data analytics, artificial intelligence (AI) and block chain.
To counter this uncertainty, Jasco will continue to execute its strategy and concentrate on the following additional key areas:
- Maintain its focus on costs and ensure a continued improvement in sustainable profitability levels in all business units;
- Reduce the financial gearing below the internal target of 50% from the cash generated by Jasco's operations;
- Review the capital structure in consultation with the major shareholders to unlock potential future growth opportunities; and
- Pursue revenue growth in the following areas: Smart Enterprises; Open access networks; Fifth-generation (5G) networks and IOT Analytic by adding new products and services to Jasco's portfolio, with specific emphasis on Managed Solutions as a fast-growing and higher-margin business area.