JSE-LISTED tech group Altron’s share price slid 1.8 percent to R10.82 per share yesterday in intraday trading, despite it pointing to its 2.0 Strategy as starting to bear fruit for the business.
Altron’s 2.0 Strategy, introduced last year, is anchored on organic growth supplemented by carefully selected acquisitions in local and international geographies.
The group reported a 71 percent jump in operating profit to R173 million for the six months ending August 31.
Altron’s headline earnings per share also rose by a significant 238 percent to 11 cents per share for the period.
The IT services management company said cash generated from operations rose 79 percent to R527m, with revenue for the six months rising by 2 percent to R3.5 billion.
As a result, Altron declared an interim dividend of 7c per share, down from 33c per share in the same period last year, due to the negative non-operational payment expenses recognised as a result of the Bytes UK demerger.
Altron group chief executive Mteto Nyati said the firm had delivered a very resilient performance in the face of a challenging operating environment.
Nyati said this demonstrated the benefits of a diverse and high-quality portfolio of businesses across various platforms.
“The benefits of our diverse and high-quality portfolio of businesses operating across the Own Platforms, Digital Transformation and Managed Services segments resulted in Altron delivering an operating profit growth of 71 percent.
“We are positive about the group’s growth in automation, cloud computing, data and security aligned with the segments in which we operate.
“We are focused on driving high annuity revenue, ownership of intellectual property and capital light operations.”
The Own Platforms segment generated R1.4bn in revenue, which was up 6 percent against the prior year, while the operating profit grew by 27 percent to R251m.
The Digital Transformation segment’s revenue, however, declined by 11 percent to R1.1bn due to systems integration’s under-performance against expectations and the prior year.
The Managed Services segment also incurred an operating loss of R9m from a profit of R21m as managed solutions’ banking segment came under pressure, forcing it to retrench workers.
Altron Nexus also encountered challenges due to the freezing of capital expenditure and diversion of funds by its government customers to Covid-19 personal protective equipment and social development programmes.
Having assessed its strategic footprint in Africa, Nyati said the board decided to disinvest from Altron Rest of Africa operations and at the end of the first half, Altron, however, will retain a presence in Africa through a partnership operating model.
Nyati said the board was considering potential acquisitions which were aligned to their own platform and digital transformation segments.
He said key focus areas for the second half of the year included the acceleration of profitable revenue growth for Altron Systems Integration, and building and qualifying the acquisition pipeline, while disposing of Altron Document Solutions and Altron Arrow.
BUSINESS REPORT ONLINE