Altron increases profit, says UK growth exceeded expectations
Altron [JSE: AEL] reported 8% growth in revenue from continuing operations to R8.53 billion, with headline earnings up 4% for the six months to end-August. An interim dividend of 29 cents per share was declared.
Altron owns vehicle tracking group Netstar, and through various businesses - including under the Altron Bytes brand - is involved in ICT services, including secure transactions, IT training and inbound and outbound contact centres.
Some of the highlights of the past six months included Netstar’s partnership agreement with Toyota and Vodacom, as well as growth in its Altron Bytes UK operations exceeding its expectations.
But the group was also hit by a high court verdict which allowed the City of Tshwane to set a large contract aside. Altron holds a stake in Thobela Telecoms, which was granted a contract by the then ANC-led council in 2016 to install a municipal broadband network. But the incoming DA city government stopped the contract after it alleged that due process was not followed in awarding it. In its annual report, Altron said it was owed R301m as part of the project.
Also, three senior executives of its subsidiary Altron Nexus were suspended after potential internal irregularities involving procurement. On Thursday, Altron said that the “precautionary suspension of key executives” remains ongoing. Altron Nexus also saw increased working capital demands as a result of large infrastructure projects, the company said.
The integration of Altron Karabina, the Microsoft solutions business which it acquired last year, was slower than expected. “However, this acquisition remains strategically relevant to the group given their capabilities in the fast-growth cloud and data analytics environment.”
By 10:00 on Thursday, its share price was down 1.5% to R26.85 – close to its highest level in five years (R28), reached in July.