In the six months to end-August, the group divested some of its non-core assets and continued to reduce its exposure to the manufacturing sector.
“The focus of the remainder of the current financial year is to position the group to deliver on its growth targets going forward by completing the process of focusing the group squarely into the ICT sector and completing the restructuring and realignment exercises,” the group said. Altron subsidiary Powertech Industries disposed of its 100 percent interest in the Auto X group for R324million in July and also sold Webroy for R11m on March 1.
In August, Power Technologies sold 100percent of its equity interest in Powertech System Integrators for R30m. Disposing these non-core assets has enabled the company to report improved results in the continuing operations businesses.
In the continuing operations, revenue grew5 percent to R6.8billion, while Ebitda increased 19percent to R501m on a normalised and constant currency basis. The normalised Ebitda margin improved to 7.4percent, compared with 6.5percent in the prior period. “Much of this growth came from the international operations as local trading conditions remain challenging,” the group said.
Net interest costs in the continuing operations marginally increased from R83m to R87m. The group said this increase reflects a combination of higher borrowing costs as well as an increased allocation of debt to the continuing operations as a result of the reduced expectations around proceeds from the sale of the discontinued operations.
Normalised and constant currency headline earnings increased by 27percent from R165m to R209m, while normalised currency headline earnings per share (Heps) grew by 16percent to 57 cents a share against the prior year of 49c.
In the discontinued operations, the group showed an improvement in the results, with the loss reducing to R95m, down from R224m last year. Earnings before interest, tax, depreciation and amortisation (Ebitda) losses in the current period improved to a loss of R9m compared with a prior period loss of R65m, with the main improvement coming from Altech Multimedia business, while the Powertech business saw a 48percent deterioration from the prior corresponding period.
The group also made some acquisitions during the period. The Altech Netstar business acquired vehicle tracking and fleet management firm EZY2C in Australia, effective July, for a maximum purchase price of A$15.9m (R173m), of which R95m was paid upfront.
The remainder is payable on the achievement of certain earn-out targets over the next two years. Altron said the acquisition contributed revenue of R15m and a net profit after tax of R5m.
It also helped to bolster Altech Netstar’s strong performance during the period under review, with revenue up 12percent and Ebitda up 6percent.
- BUSINESS REPORT