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Jasco Electronics: Empowered Growth in Technology Sector

Learn about Jasco Electronics, a leading technology company with a strong BEE profile, sustainable growth, and a focus on empowerment.

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Jasco Electronics: Empowered Growth in Technology Sector

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  1. JOE MADUNGANDABAIncoming CEO: JASCO ELECTRONICS HOLDINGS LTDMARTIN LOTZCOO: JASCO ELECTRONICS HOLDINGS LTDDr STUART ROBERTSONOutgoing CEO: JASCO ELECTRONICS HOLDINGS LTD Nedcor mid-cap conference 1 August 2005

  2. INTRODUCTION & JASCO’S EMPOWERMENT PROFILE Joe Madungandaba Incoming CEO

  3. CURRENT SHAREHOLDER PROFILE • BEE/CIH (35,1%) • Public (33,2%) • Management and directors (21,5%) • Institutions (10,2%) .

  4. JASCO’S BEE PROFILE • Currently a BEE entity (51% voting rights) • Will become black owned in 2008 (“conversion” of prefs to ords based on CPIX+5% hurdle rate) • 2nd most empowered company in listed industrials • Broad-based empowerment independently verified by EmpowerDEX “A” rating • BEE status has already won new business and brought many new opportunities • BEE partners active on the Board/Exco

  5. STEP 1. ACQUIRE TASSLELANE ORIG. JASCO S/HOLDERS CIH STEP 2. ISSUE 21m ORDS & 30m REDEEMABLE PREFS & OBTAIN WAIVER OF OFFER TO MINORITIES 49m ORDS ORIG. JASCO S/HOLDERS CIH 30m PREFS 51% VOTING CONTROL 49m ORDS 21m ORDS CIH ORIG. JASCO S/HOLDERS 51% MAJORITY CONTROL 49m ORDS 51m ORDS BEE TRANSACTION 2003 BEE Entity 2003 – 2008 STEP 3. PRO-RATA CONVERSION OF PREFS TO ORDS BASED ON CPIX+5% HURDLE RATE FOR GROWTH FROM 2003-2008 2008 BLACK OWNED Co. 2008+

  6. BEE PARTNERS - THE CIH GROUP • Founded in 1995 • Led by Dr Anna Mokgokong (Chair) & Joe Madungandaba (CEO) • Entrepreneurial business with turnover currently in excess of R4 billion p.a. • Key investment strategy focused on: • Businesses involved in infrastructure development • Medium/large companies with above average growth potential & established management • Ensuring active/ongoing management involvement

  7. THE CIH GROUP Corporate Finance & Deal Flow Richard Came Nic Venter CZ ELECTRONICS DARTCOM MCT TELECOMS TOFO COSOURCE SUKUMANI TELECOMS Q MUZIK MALESELA TAIHAN ELECT. CABLE (M-TEC) MALESELA TECH. SERVICES MALESELA POWER PANELS MT&D NU-LEC CONLOG JASCO ELECTRONICS

  8. JASCO’S PERFORMANCE

  9. OPERATIONAL OVERVIEW Martin Lotz Group COO

  10. GROUP STRUCTURE 3X OPERATING DIVISIONS An integrator and supplier of surveillance & other security systems A provider of specialised, value added solutions, products and services to telecoms networks A focused component manufacturer to the electrical and electronics industries

  11. BUSINESS MODEL (33%) (25%) (50%) (25%) (66%)

  12. PMR/RF EQUIP. ANTENNAS MASTS HI SITES ACCESS NETWORK EQUIP. (INCL. TEST & BILLING S/WARE) CONNECTORS AND JOINT ENCLOSURES WIRING HARNESSES FOR FRIDGES AND STOVES PLASTIC EXTRUDED COMPONENTS ELECTRONIC SUB-ASSEMBLIES FOR AUTO’s POOL CHLORINATORS PRODUCTS AND SERVICES TELECOMS MANUFACTURING SECURITY • TURNKEY ELEC. SECURITY SYSTEMS • CCTV SURVEILLANCE SYSTEMS • ACCESS CONTROLS SYSTEMS • ALARMS • PNEUMATIC TUBE SYSTEM

  13. COMPETITOR ANALYSIS Security • Intervid • Provicom • Siemens (ESD) • Cuincidence/ BAC* • Guarding Co’s* Telecoms • Grintek • Spescom • Andrews* • Sietel* • Alan Dick* • Altron* Manufacturing • Smaller engineering shops* • Backward integration by customers* * Combination of a competitor and/or customer and/or a supplier

  14. HIGHLIGHTS - 2005 • Consolidation and turnaround complete • Loss-makers have been turned around • All operating divisions profitable • Cash flow significantly improved • Debt eliminated and balance sheet significantly strengthened

  15. HISTORICAL PROFIT FROM OPERATIONS

  16. FUTURE GROWTH & PROSPECTS Dr Stuart Robertson Outgoing CEO

  17. JASCO’S PERFORMANCE

  18. Strong BEE credentials KEY GROWTH DRIVERS Export Own IP NEPAD infrastructure build Sustainable growth & positive outlook Ongoing need for Security Telecoms Growth in SA & Africa Consumer demand (middle market)

  19. STRATEGIC INTENT I • Sustainable organic growth: • Exploit experience and BEE status to grow organically • Expand new products and services in de-regulated telecoms environment • Grow annuity type income to reduce earnings volatility • Continue generating cash to strengthen balance sheet • Use cash cows to fund organic growth • Maintain dividend payments (3X cover) • Sustained delivery in all businesses

  20. STRATEGIC INTENT II • Acquisitive growth: • M&A activity in SA largely centered around BEE deals • Use Jasco’s BEE status & partners to expand portfolio of businesses in the ICTE sector • Consider companies within the CIH stable to exploit synergies in the technology sector • Utilise CI Ventures’ experience and “venture capital” resources to filter potential acquisitions • C I Ventures’ incubator provides ongoing deal flow & helps reduce Jasco’s risk

  21. OUTLOOK 2006 AND BEYOND • Organic growth underpinned by well established, diverse businesses in growing markets (incl. exports) that are cash generative • Ongoing cash generation and strong balance sheet can be used to fund the organic growth • BEE credentials and “hands on” BEE partners underpin future growth potential, especially by bringing acquisition opportunities/consolidation • Major BEE shareholders with long term goals • Positive prospects

  22. QUESTIONS?

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