Jasco Electronics increased its broadband offerings in the rest of the continent with the acquisition of RapidCloud Technologies, a local wireless broadband equipment supplier.
The acquisition was effective on April 1. The group did not disclose the value as it was a small acquisition, but chief executive Martin Lotz said the value was 5 percent less than Jasco’s market value. Jasco’s stock was up 9c to close at R3.20 yesterday, giving it a market capitalisation of R231 million.
Lotz said the deal would give Jasco a footprint in sub-Saharan Africa, where RapidCloud Technologies operates, enhance its broadband product range and strengthen its technical and marketing expertise.
"It gives us wireless products that we didn’t have and will help us expand into the rest of the continent as well as broaden our offering," he said.
Jasco operates three divisions: security, which offers closed-circuit television products and services, and alarm monitoring systems; the manufacturing division, which specialises in the cutting of wire, the moulding of plastic components and the manufacturing of electrical plugs; and telecommunications, its biggest division, which provides both fixed-line and wireless equipment to the local network operators.
Jasco’s entry into the broadband market in Africa follows that of Allied Technologies, also a telecoms equipment and services operator, which said this week that it had entered into a partnership with US-based CityNet Wireless to distribute its broadband products in sub-Saharan Africa.
Lotz said this partnership showed that growth prospects for broadband in Africa were positive.
Yesterday, Jasco posted a 44.4 percent growth in net profit after tax to R26.2 million for the year to February. The performance was boosted by the growth in the telecoms industry.
Headline earnings per share increased by 37.5 percent to 38.1c. Cash from operations doubled to R47.2 million from R23.4 million.
The telecoms division contributed 58.6 percent to revenue and 75 percent to operating profit. It posted revenues of R235.7 million and operating profit grew by 69.8 percent to R39.8 million.
Manufacturing and domestic products operations increased revenue by 33.7 percent to R114.9 million.
The security business continued its disappointing performance form the first half, and ended the year with a small profit of R142 000.