As smart technologies firm Jasco Electronics emerges from a milestone year that represented stability and consolidation, the JSE-listed group will focus on two levers of growth, in addition to its identified group focus areas, in a year set to be marred by worsening economic conditions.

Despite encountering one of the “most challenging years”, facing “extremely tough trading conditions” during the year ended June 30, Jasco bounced back into the black, unlocking triple-digit increases in profits and declaring a dividend for the first time in four years.

Jasco CEO Pete da Silva attributed the strong performance to the resilient and stable foundation the company maintained following a three-year restructure.

“Against these conditions, we are very pleased that all business units were profitable this year, that revenue was maintained at close to R1.1-billion, profit before interest and tax was improved by 46%, profit after tax by 119%, earnings per share by 116% and headline earnings per share by 164%,” he told shareholders at the company’s financial presentation in Johannesburg on Monday.

Jasco’s 2016 earnings a share reached 6.3c, up 116.3% on the loss a share of 38.7c reported in 2015. Headline earnings a share increased 163.5% from 2.4c apiece in 2015 to 6.3c a share for the year under review.

The group’s profit for the year surged 119.2% to R15.9-million, compared with the loss of R82.8-million reported in the prior year.

Some other highlights of the year for the company included a 61% improvement in cash generated from operations – the strongest position reported in eight years – a reduction in group debt, with an improvement in the gearing ratio from 73% to 54%, and profitability across every operation.

The company reported operating profit of R41.7-million in the year to June 30, compared with the operating loss of R72.5-million in 2015.

“Jasco is in a more stable position now, with an improvement in the quality of earnings and cash generation. The current economic climate is unfortunately expected to prevail throughout 2017, which is set to impact the first half of the year,” he said.

Jasco, aiming to mitigate the effects of the difficult economic environment, will intensify efforts to diversify geographically and build scale.

“To weather these conditions, we will continue to execute our strategy and focus on a number of key areas over the next six to 18 months,” he noted.

This includes the continued expansion into the rest of Africa by leveraging off the recently established base in Kenya, completing the establishment of an office in Dubai, based on current customer geographic expansion, and targeting renewable-energy in the Middle East market.

Jasco will also evaluate bolt-on acquisitions to ensure its smaller businesses achieve the required critical mass.

“We will maintain our focus on costs and ensure a return to acceptable and sustainable profitability levels in the Enterprise business and reduce financial gearing to less than 50%,” Da Silva commented.

Finally, Jasco will continue its transformation, with black ownership, employment equity and skills development a key priority, and improve the group's broad-based black economic empowerment rating.