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Press Release

Altron announces annual results

JSE listed Allied Electronics Corporation Limited (Altron) today announced its annual results for the year ended February 2012.  Revenue increased by 3% to R23.6 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) decreased 7% to R1,946 million against the comparative year in 2011. As a result of a higher than normal tax charge, adjusted diluted headline earnings per share declined 15%.Bytes reported excellent results with Altech and Powertech experiencing more challenging times as a result of underperformance of a number of their key operations, said Altron Chief Executive, Robert Venter.Bytes was the groups largest headline earnings contributor, with EBITDA increasing by 11% to R527 million, despite flat revenues of R6.1 billion mainly as a result of the non-recurrence of the National Health Services contract in the United Kingdom. Bytes Managed Solutions and Bytes Systems Integration were strong performers with these businesses securing large key accounts during the year.  Bytes Connect saw excellent cost benefits from the consolidation of three divisions into one, which had a big effect on its profitability. In Bytes Document Solutions, the core Xerox business performed satisfactorily while both LaserCom and Nor Paper recorded disappointing performances. Bytes Healthcare Solutions reported steady results while Bytes People Solutions exceeded expectations.Bytes concluded a number of acquisitions during the year namely Security Partnership Limited, a leading provider of securities solutions in the UK, and Unisys Africa amongst others.  Unisys Africa is an active participant in the public sector, which Bytes anticipates, together with its newly established government sales team, will help penetrate this market in the medium term. Bytes continues to actively pursue various potential acquisition opportunities that will complement its current businesses.Altechs overall results were negatively impacted by significant impairments in the East and West African businesses. Revenue increased by 3% to R9.97 billion while EBITDA declined by 14% to R919 million. Other operations within the Altech group performed in line with expectations, with the majority reporting good growth figures.  Altech Multimedia returned to profitability, and both Altech Autopage and Altech Netstar, the Altech groups largest businesses, performed satisfactorily. The merger of Altech Technology Concepts and Altech Autopage Cellular will soon enable the entity to offer bundled services e.g. converged voice and data to its large client base, while Netstar is assessing international expansion opportunities.I believe we are making progress in the two areas in which Altech is experiencing problems.  We are disposing of the West African business and we have taken significant remedial action in Altech East Africa namely the appointment of a new, highly experienced, management team who has been tasked with resolving the existing operational and financial difficulties including focusing on network reliability, client requirements and relationships. Several key projects, notably the Nairobi data centre and the Kampala-Kigali fibre link, have recently been completed and are now generating revenue, said Venter.Altech continued the acquisition trend acquiring two businesses i.e. Eyenza Mobile Money, an e-wallet based payments system, and SetOne GmbH, a Germany-based supplier of digital video broadcasting (DVB) based products and solutions. A number of empowerment transactions were also concluded, assisting Altech to reach a level 3 B-BBEE rating.The Powertech businesses, with the exception of the Cables group, performed well.  Overall, revenue increased by 6% to R7.5 billion, while EBITDA reduced by 7% to R500 million. The Cables group was negatively influenced by a poor performance at Aberdare International, caused by very difficult economic conditions in Iberia, while the local cable business also fell short of expectations albeit recording a much improved performance in the second half of the year.The only business in Powertech that is impacting results is the Cable business which is negatively influenced by the depressed building and construction sector.  Demand from the infrastructure sector, including ESKOM and municipalities, was strong. The other businesses namely Powertech Transformers, Batteries and Systems Integrators all reported excellent results. After the numerous cost-cutting and rationalisation steps taken, I believe that the Cable business is now lean and this will convert to enhanced profitability as the building and construction sector turns, said Venter.During the year, Powertech entered into a Joint Venture with EnerSys, a NYSE listed, global leader in stored energy solutions for industrial applications, by selling 50.1% of its industrial battery business incorporating Battery Technologies, Rentech and Willard Industrial Division to EnerSys. The transaction, which combines the technological know-how of both entities, provides Powertech with access to new products and markets in Sub-Saharan Africa.For the financial year ending 2013, Altron will focus on growing revenue while leveraging off the low cost base that has been achieved over the last few years.  This will be done by focusing on both organic growth and further acquisitions while keeping our focus on costs and improving working capital.  Special attention will also be paid to getting the currently underperforming businesses back on track, concluded Venter.

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