Chief Executive Mteto Nyati at the Altron released their interim results for the six months ended August 31 2019 on October 24. Photo: Nokuthula Mbatha/African News Agency (ANA)

DURBAN – JSE-listed Allied Electronics Corporation (Altron) has set itself an ambitious target of R100 million in earnings before interest, tax, depreciation and amortisation (Ebitda) in its Altron Karabina subsidiary over the next three years. 

Chief executive Mteto Nyati said the integration of Altron Karabina, which was acquired in September last year, had been slower than expected but remained strategic, given its capabilities in the fast-growing cloud and data analytics environment.

“We want to replicate in Altron Karabina in what we have done in Bytes UK, where we achieved a strong Ebitda growth of 46 percent in the half year results,” Nyati said. “We want to grow this R40m Ebitda to R100m in the next three years.” 

Nyati said Altron Karabina was recently awarded Microsoft Licencing Solutions Provider (LSP) status following a rigorous tender adjudication process. “The LSP contract is similar to the long-standing partnership which Altron has with Microsoft through Altron Bytes UK,” he said. “Accordingly, management is confident that Altron Karabina will be able to leverage off this existing relationship and emulate the successful UK experiences in the SA marketplace as well.” 

Nyati said Altron Karabina aimed to be one of the leading Microsoft licensing solutions partners. In the six months to end August, Altron Karabina added R86m in revenue to Altron.

Altron’s overall Ebitda from continuing operations rose 19 percent to R803m and revenue from continuing operations increased by 8 percent to R8.5 billion. 

The group’s offshore revenue now contributes 49 percent of total Altron Group revenue.

Headline earnings per share from continuing operations increased 4 percent to 73 cents a share while basic earnings per share from continuing operations also increased 4 percent to 76c.

The group declared an interim dividend of 29c a share.

“The growth was primarily to three of our operations, Bytes UK, Netstar and Altron Bytes Systems Integration. We also accelerated the execution of our One Altron Strategy, which focuses on doing more with existing customers, while continuing to win new customers. This has delivered organic growth for our business,” Nyati said. 

Altron Bytes Systems Integration increased its Ebitda by 36 percent and Netstar, inclusive of its Australian operations, reported a 13 percent increase in Ebitda during the period. 

Nyati said the first half was not without its challenges compounded by sluggish growth in its home market of South Africa.

He said Altron Nexus was also negatively impacted by the City of Tshwane Broadband Network judgment handed down against Thobela Telecoms as well as the suspension of key executives.

Nyati said the group’s focus would remain on organic growth, supplemented by acquiring select small-to medium-sized businesses in its focus areas, which will lead to enhanced capabilities and expanded geographic footprint.

Altron declined 2.97 percent on the JSE on Thursday to close at R26.45.

BUSINESS REPORT