Altron warns its annual earnings likely to fall 29% on Covid-19 disruption
DURBAN - ALLIED Electronics Corporation (Altron) yesterday warned that its full-year earnings were likely to fall as much as 29 percent, partly because of poor economic activity and the trading restrictions put in place to limit the impact of Covid-19.
As a result, Altron said in a trading update, it expected its headline earnings per share (Heps) for the year to the end of February to decline by between 21 percent and 29 percent, to between 124 cents and 137c a share, down from the restated figure of 174c reported a year earlier.
However, its basic earnings per share (Eps) were likely to reflect an increase of more than 100 percent, to between 3 256c and 3 270c, compared with the restated Eps of 175c reported last year.
The group said the increase in basic Eps was mainly a result of the realised profit on the recent demerger of Bytes Technology Group, which was finalised on December 17 last year.
“The Heps, which excludes the profit on Bytes UK demerger, was negatively impacted, as Bytes UK was previously a material component of the Altron Group earnings, and by the poor economic activity and the trading restrictions brought about by the Covid-19 pandemic,” the group said.
The information technology group listed its subsidiary Bytes on the London Stock Exchange, with a secondary listing on the JSE, in December last year.
Altron chief executive Mteto Nyati said last year that the rationale behind the demerger was to enable Bytes UK to operate in a more focused and efficient manner, and to allow it to achieve its strategic goals and unlock value for Altron ordinary shareholders in the long term.
Altron announced the demerger in April last year. It said the move followed a review of its portfolio which showed that Bytes’s value was not reflected in Altron’s share price, while its growth path was different to that of the rest of the business.
Bytes UK provides software, cybersecurity and cloud services.
The trading update follows the group announcing the acquisition of digital signatures services company Lawtrust from Etion for R245 million last week, in a move that would position Altron Security as a one-stop-shop for digital and information security.
Lawtrust provides services to more than 500 customers in the private and public sectors, and is considered one of the leading cyber and information security companies in South Africa.
Altron expects to release its results for the year to the end of February on May 17.
Altron shares closed 2.28 percent higher at R11.64 on the JSE yesterday.