Jasco Electronics Holdings (JSE:JSC) News - Summary of the unaudited interim results for the six months ended 31 December 2021

JASCO ELECTRONICS HOLDINGS LIMITED
Registration number 1987/003293/06
JSE share code: JSC
ISIN: ZAE000003794
("Jasco" or "the company" or "the group")

SUMMARY OF THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31
DECEMBER 2021

Highlights
•    Revenue from continuing operations up 1%
•    Operating profit from continuing operations up 680%
•    Net interest paid reduced by 31%
•    Headline earnings per share up 104%

Introduction
Market conditions during the six months to 31 December 2021 remained
challenging, with Jasco’s customers and the general South African economy
impacted by COVID-19, the social unrest in July 2021 and the metal
industries strike in October 2021.

In these conditions, Jasco continued to focus on the group’s turnaround,
with a number of achievements during the reporting period:

•    The successful restructure of the loan from its lender the Bank of
     China into a three-year term loan in December 2021
•    An improvement in revenue and operating profit from continuing
     operations, with a strong recovery in the Communication Solutions
     business unit and continued good cost control across the group
•    The finalisation of the capital raise through the Rights Offer,
     which concluded on 7 February 2022 with an amount of R48,3 million
     raised

Financial summary
The results of Reflex and Property Technology Management, which were
disposed of in the previous financial year, are separately disclosed as
discontinued operations for the current and prior reporting periods.

•    Revenue of R352,0 million was 1% higher (Dec 2020: R347,8 million)
•    Profit before interest and taxation (PBIT or operating profit)
     improved by 680% to R11,3 million (Dec 2020: R1,5 million). This
     was mainly due to the increase in revenue from Webb Industries in
     Communication Solutions and improved gross margins, as well as
     continued cost control across the group
•    Earnings per share (EPS) increased from a loss of 1.2 cents to a
     profit of 0.2 cents. EPS from total operations decreased from 4.1
     cents to 0.1 cents.
•    Headline earnings per share (HEPS) improved from a loss of 1.22
     cents to a profit of 0.11 cents and from a loss of 1.54 cents to a
     profit of 0.06 cent for total operations.
•    The statement of cash flows reflects cash generated from operations
     before working capital changes of R28,2 million compared to R34,3
     million in December 2020. Working capital changes reflect an
     outflow of R10,9 million (Dec 2020: R5,5 million outflow).
•    The closing cash balance of R26,0 million (Dec 2020: R31,7 million)
     increased from R21,0 million in June 2021

Group prospects
The economic outlook for 2022 remains uncertain, with a number of
challenges in South Africa, including the ongoing COVID-19 impact,
growing unemployment, with associated social and labour unrest, and the
continued Eskom crisis.

Jasco will continue to execute its strategy and concentrate on the
following key areas:

•     Drive organic revenue growth from its existing customer base and
      target new strategic customers.
•     Add new products and services to Jasco’s portfolio, with an
      emphasis on Managed Solutions as a fast-growing and higher-margin
      business area.
•     Keep costs under control and ensure a continued improvement in
      sustainable profitability levels in all business units.
•     Continue to reduce the financial gearing through the cash generated
      by Jasco’s operations.

Jasco’s primary focus in the short-term will remain on delivering
sustained profits. To assist the management team with the finalisation
of its long-term strategy and the group’s debt refinance and syndication,
it has appointed a specialist advisory company, Apeiron Capital.

Subsequent events
Jasco has successfully concluded a rights offer and raised R48,3 million
of the targeted R55 million. R20 million of the proceeds was used to
settle the group’s corporate bond and R20 million was paid to the Bank
of China, while the balance will be utilised to fund the group’s working
capital requirements. The group’s gearing ratio (excluding lease
liabilities) improved from 308% to 102%.

There are no other material events to report.

Directors’ statement of responsibility
This short-form announcement is the responsibility of the directors and
is only a summary of the information in the full announcement and does
not contain full or complete details. The full announcement can be found
on the company’s website at www.jasco.co.za or
https://senspdf.jse.co.za/documents/2022/jse/isse/JSC/JSCHY2021.pdf.
Copies of the full announcement may also be requested at the company’s
registered office and at the office of the sponsor, at no charge, during
office hours. Any investment decision should be based on the full
announcement published on the company’s website.

For and on behalf of the board
Dr ATM Mokgokong           WA Prinsloo                 LA Prigge
(Non-executive chairman)   (Chief executive officer)   (Chief financial officer)

Midrand
16 February 2022
Sponsor: Grindrod Bank Limited

Date: 16-02-2022 02:30:00
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