JOHANNESBURG - JSE-listed technology company Allied Electronics (Altron) said on Thursday that it planned to demerge and separately list its UK business, Bytes UK, to unlock value for shareholders.
Altron is valued at roughly R7.2 billion.
Bytes UK will be listed in the UK, with a secondary listing on the JSE.
"While Altron will remain listed on the JSE, it plans to demerge from its remaining investment in the UK," it said.
Mike Leeming, the chairperson of the Altron board, said the board’s decision to separately list Bytes UK was made following a review of the new financial year strategy.
“The Board assessed each of the business units within Altron to identify opportunities which have the potential to unlock further value for shareholders and streamline operations.
The Board then concluded that the true value of Bytes UK, a wholly owned subsidiary of Altron, is not reflected in the company’s share price. Through the demerger and separate listing of Bytes UK, we are looking to optimise the business and unlock additional value for shareholders.”
Altron group chief executive, Mteto Nyati, said through the One Altron strategy the group had streamlined, focusing on its core capabilities of technology services and solutions by disposing non-core assets, rationalising operations and making high-growth acquisitions, which resulted in consistent double-digit earnings before interest, taxes, depreciation, and amortization, interest growth over the past three years.
“We achieved a total shareholder return of 26 percent per annum, and the return on capital employed increased from 6.3 percent to 20.8percent over the same period,” he said.
Nyati said the potential demerger of Bytes UK marked a new era for Altron, which would now be focused in Africa, serving its more than 20 000 customers located on the continent.
"Any future geographic expansion will be from this solid African base," he said.
The process was likely to take between nine to 12 months, depending on capital market conditions, Altron siad. . If financial markets had not corrected by then, Altron said it might decide to hold off on Bytes UK’s demerger and its separate listing.