JSE-listed technology company Jasco has reported a 98,1% slump in headline earnings per share for the year ended 30 June as the result of what it calls “corrective action” that led to “decisive action in underperforming areas of the business”.

It has warned that the full benefits of a three-year restructuring programme, begun in the 2012 financial year, will only be felt in 2015, and now plans a rights issue to raise between R30m and R60m from shareholders before the end of the calendar year.

It says an announcement on the planned rights offer will be made once there is “further certainty”.

Revenue in the 2013 financial year rose by 16,3% to R1,15bn, but an operating profit of R31,2m in 2012 turned into a R93,5m loss in 2013.

The “corrective action” resulted in Jasco, which is led by former Siemens Southern Africa CEO Pete da Silva, exiting from “certain manufacturing businesses”. These are Lighting Structures, which was sold to LeBlanc International in December 2012, and Telecommunications Structures, which was sold to LeBlanc in July 2013. Another subsidiary, M-Tec, is “held for sale” amid ongoing talks with shareholder, Korea’s Taihan Electric Wire Company.

“Jasco is a 51% shareholder in M-Tec, but does not have control of the business in terms of the original shareholders’ agreement,” the company says. “Due to the continuing underperformance of the business and the tough trading conditions in this sector over the last 12 months, the Jasco board has decided to exit this investment.”

Jasco core operational business performed well, it says, with core profit before interest and taxation (excluding headline earnings adjusting once-offs, restructuring costs of R14,4m and businesses exited) coming in “above expectations”.

The company is in year two of a three-year restructuring programme. Projects undertaken include consolidating five business units, the removal of several management positions, the de-registration or sale of 13 legal entities, expanding the company’s footprint and reducing reliance on large customers for a big chunk of revenue.

“The full benefits of the three-year restructuring programme will be seen from [financial year] 2015,” Jasco says.

The group’s main focus areas in the current financial year, which ends in June 2014, are improving its funding position and reducing its interest burden — it has a bank overdraft of R56m — include exiting M-Tec and settling the preference shares as well as raising capital through various mechanisms, including the rights offer. It will also continue to exit low-value-added manufacturing and improve earnings by consolidating procurement and improving working capital.