New chief executive Werner Kapp said in a presentation yesterday that although it was difficult to make a forecast for the second half, after having only been in office for 15 days, all the businesses were performing well. Picture: Supplied
Altron Group lifted headline earnings per share 242% to 41 cents in the six months to August 31, after the technology group’s operations performed well, with all of them becoming profitable, in a challenging environment.
New chief executive Werner Kapp said in a presentation yesterday that although it was difficult to make a forecast for the second half, after having only been in office for 15 days, all the businesses were performing well, barring “one or two” facing short-term problems, and he and the management of these entities were “rolling up our sleeves” to deal with problems.
The group’ directors said in a statement that “a solid second half” and further strengthening of the balance sheet was expected, in spite of ongoing challenges facing the industry, including a global components shortage, national blackouts and inflationary fuel and currency pressures.
An announcement of the sale of the banking business in Altron Managed Solutions was “imminent”, said Kapp.
Yesterday, Grant Fraser was appointed the managing director (MD) of Netstar, effective January 2023.
A week ago, Altron also appointed Collin Govender as MD of Altron Systems Integration. Govender became MD of Altron Karabina in January 2021, and had turned around the business.
Revenue from group continuing operations was up 15% to R5.3 billion, while operating profit before capital items was up 57% to R255 million. The interim dividend was raised 129% to 16 cents. Operating free cash flow increased by R103m, up by 136%.
Kapp said Altron’s Fintech, Security and Arrow business segments, all leaders in their markets, had, in particular, delivered strong performances in the first half.
The Own Platforms segment lifted revenue 16% to R1.63bn. Netstar's revenue of R909m increased 8.7%, but a change in sales mix and increased GSM costs to counter the impact of load shedding hurt profitability.
Altron FinTech's revenue of R542m increased 35.5%, while operating profit of R132m grew by 71.4% due to better margins.
Altron HealthTech's R176m revenue was up 9.3%. Reduced switching transaction volumes due to lower patient visits to doctors and pharmacies and the impact of load shedding on doctors' operating hours contributed to a flat R43m operating profit.
The Digital Transformation segment's revenue of R1.37bn, which includes the contribution of Lawtrust, acquired on October 1, 2021, increased 25.7% with operating profit of R71m, representing a growth of nine times compared to the prior year.
Altron Systems Integration saw a 6% improvement in revenue to R933m and a modest breakeven operating profit of R2m due to customers’ reduced capital expenditure, global components shortages giving rise to prolonged lead times and a backlog in hardware sales.
Altron Karabina's software sales contributed R171m to revenue and operating income of R11m, an improvement of 11% and 175% respectively. High licence and software sales attributed to Altron Security tripling revenue to R266m and growing operating profit of R58m, six times over the prior year.
The Managed Services segment revenue of R1.36bn was 16.6% ahead, and it generated R21m operating profit compared to last year’s R9m loss. Altron Managed Solutions' revenue of R900m was 17% higher and operating income of R19m was well up from a prior year R5m loss.
Altron Nexus increased revenue 15.7% to R458m and a R2m operating profit demonstrated the “green shoots” of a turnaround focus for this business, directors said.
Within the segment Other, Altron Arrow's revenue of R321 million reflected a 26.4% improvement on the prior year, driven by higher component sales created by the global shortages and the Enterprise Computing Solutions software business. Arrow's operating income was 75% higher at R21m.
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