JSE listed Allied Technologies Limited (Altech) today announced the Groups annual results for the year ended 28 February 2010. I am pleased with the strong performance that has been delivered by the majority of Altechs operating companies. In particular Altech Netstar, Altech Stream East Africa, Altech Fleetcall and Altech Card Solutions performed well. Our Group operating margin increased to 10.1% from 9.5% in 2009, and our Adjusted Headline Earnings per share to 605 cents. Altech Stream East Africa has proven to be a sound investment and already contributes 20% of the Altech groups total operating profit, said Altech CEO, Craig Venter.
He continued, Annuity revenue remained a strong focus, increasing to 82%, previously 79%, of total revenue, and providing stability for the Group in a slow recovering market. Working capital management, stringent cost control and improved profit margins resulted in a robust balance sheet and our cash position remains strong at R616 million despite a number of acquisitions made.
Financial highlights for the year ended are as follows:
¢ Revenue R9.2 billion
¢ Operating profit R933 million
¢ Operating income margin 10.1%
¢ EPS 536 cents per share
¢ Adjusted HEPS 605 cents per share
¢ Net cash R616 million
¢ Dividend 339 cents per share
¢ Return on equity 26.1%
Transformation has been high on the agenda for Altech which concluded a 25% plus one share empowerment transaction valued at more than R1.5 billion with Thebe Corporation and Identity Capital Partners through Altech Netstar. The deal includes Altech Netstar Fleet Solutions, ComTech and 50% of Altech Netstar Traffic. Plans are also currently underway to conclude the replacement of the current empowerment partner of Altech Alcom Matomo with a broader empowerment partner. The transaction will include shares in both Altech Alcom Matomo and Altech Alcom Radio Distributors.
The new acquisitions made during the year have all performed well, with NuPay exceeding its forecasts and Fleetcall and Technology Concepts both achieving significant growth, said Venter.
During the year under review, Altech gained interests in two East African submarine cables i.e. TEAMS and Seacom. KDN, a 60.8% Altech subsidiary, acquired an 8.5% overall (10% of the Kenya share) equity stake in TEAMS and Altech also entered into a strategic bandwidth alliance with Seacom, procuring an equivalent of 5 Gbps on the undersea cable and selling USD 20 million worth of capacity on the East Africa terrestrial backbone owned by KDN to Seacom.
TEAMS is operational and dual redundancy capacity is currently being sold. We are also utilising over 70% of our Seacom bandwidth capacity, the majority of which has been on-sold through Altech Mauritius. We hope to channel most of our African business through this subsidiary in the future, said Venter.
Construction of a state-of-the-art data centre, which is VeriSign Level 7 security approved, is currently underway in Kenya. Completion of the data centre is estimated to be October this year. It will be used for disaster recovery, data archiving, hosting and intrusion management for regional governments and large corporates.
The data centre will add another dimension to our East African business which currently largely comprises of Network fibre, ISP and broadband services.
Looking to the future Altech will continue to diversify its income base within the TMT sector through globalisation, M&A activity and convergence opportunities. One of these potential opportunities is expanding into Brazil through Altech Netstar and into various emerging markets through Altech UEC.
Our objective is to diversify our profit contribution so that we have limited reliance on any one entity. This has to a large degree already been achieved with the Altech Stream East Africa investment. We foresee that East Africa will be responsible of an even larger portion of profits in the near future.
Altech Technology Concepts is likely to play a bigger role in the convergence strategy of Altech going forward. Plans are underway to move the company from a second tier to a first tier ISP. Altech aims to increase its services up the value chain to include data hosting, e-Security, internet, enterprise cloud services, data archiving and capacity on demand in the future.
East Africa will remain our main focus, we are currently bedding down the investment in six countries i.e. Kenya, Rwanda, Uganda, Tanzania, the DRC and Burundi before we potentially roll-out the Altech business model elsewhere in Africa, concluded Venter.
Cost containment and margins will remain a focus for the financial year ahead.
Notes to Editors:
Altech, is listed on the Johannesburg Stock Exchange (JSE). It is focused on the Telecommunications, Multi-media and information Technology (TMT) industries and employs over 5000 employees in South Africa and abroad.
As a leading South African multi-billion rand high-technology group, Altech is involved in the design, development and convergence of telecommunications, multi-media systems and IT solutions. There is a strong focus on the convergence of these technologies and Altech is now also entrenched in the arena of secure technology solutions.
Altech has ongoing access to the latest technologies worldwide, while the groups own research and development programme actively encourages and promotes internal technology.
Craig Venter: Chief Executive OfficerTEL: +2711 715-9004
FAX: +2711 715-9045
CELL: +27 83 236 8000
EMAIL: [email protected]
Shenanda Janse van Rensburg: Group Executive: Marketing, PR and Communications
TEL: +2711 715-9023
FAX: +2711 715-9047
CELL: +27 84 777 1977
EMAIL: [email protected]