Johannesburg - Altron says its strategy to focus on its ICT assets has paid off in the six months to August, although it concedes there’s still more to do.
Altron - listed as Allied Electronics Corporation - completed the biggest deal in its history when it bought out minorities in Altech in 2013 for R1.8 billion.
In a statement released on Wednesday, it said overall revenue dropped 14 percent to R11.4 billion, while earnings before tax, interest, depreciation and amortisation gained 58 percent to R380 million. Earnings per share moved from a 151c loss per share to a gain of 6c a share.
Headline earnings per share - a key indicator of profitability - improved to 31c a share from a 64c a share los a year ago.
Altron explains its interim results have been split between continuing and discontinued operations. The Powertech group, Altech Autopage (which has ben shut down after it sold its client base), and Altech Multimedia have all been classified as discontinued or non-core operations, while the core operations comprise the information technology and telecommunications businesses of the group.
Revenue for the core operations increased 10 percent to R7.5 billion from R6.8 billion in the prior year, while earnings before interest, tax, depreciation and amortisation increased 18 percent to R445 million.
This resulted in the continuing operations generating a profit before tax of R253 million, double the profits of R126 million posted a year ago. Headline earnings improved to R183 million from R164 million, resulting in a 10 percent increase in headline earnings per share to 54 cents.
CEO Robbie Venter says the interim results reflect the success of Altron's revised strategy to focus the group on areas where it has the resources, competence and skills to leverage its competitive advantage.
"We are beginning to see the positive results of refocusing the Altron group in line with our stated strategy. The results from the core operations have been pleasing, particularly in the context of difficult and uncertain local economic and political conditions. Furthermore, the successful disposal of Altech Autopage to the major South African mobile network operators and the sale of the majority equity interest in Aberdare Cables to Hengtong, along with other smaller disposals, has enabled Altron to reduce its debt by approximately R1.5 billion and restore the group to profitability," he said.
It notes its making progress in wrapping up the sale of Altech Autopage and Aberdare Cables, and getting in the cash, which has reduced debt by R1.5 billion so far. It has R2 billion due in the next 12 months, as well as an overdraft of just more than R1 billion.
Since year-end, it has also finalised the sale of Strike Technologies, the sale of a property in Menlyn; and has signed a binding agreement for the sale of Powertech System Integrators and is close to concluding a binding offer for the Powertech Batteries Group. This will bring in another R340 million, with the potential of another R145 million, it adds.
“We continue to make progress on the disposal of the remaining non-core assets. It is also pleasing to see the benefits of the head office rationalisation coming through in line with expectations,” the listed company says.
"Although more work needs to be done in terms of continuing to improve and grow our core operations and completing the remaining asset disposals in our non-core operations, the outlook is positive with respect to getting the group back on a path of profitability and growth that is sustainable and future-proof," Venter adds.