Altron Group’s strong annuity and defensive earnings-base saw it raise its dividend 17% to 35 cents for the year to February 28, in spite of increasingly tough trading conditions.
Results for continuing operations were impacted by non-cash provisions relating to the City of Tshwane exposure and for excess inventory from the Gauteng Broadband Network contract that was not renewed.
Continuing revenue increased 19% to R9.5 billion, while earnings before interest tax depreciation and amortisation rose 2% to R1.2bn. Continuing adjusted headline earnings per share was up 19% to 89 cents. A final dividend of 19c was declared,
“The company has a strong balance sheet and remains highly cash generative with low gearing ratios, providing flexibility to pursue its growth strategy,” CEO Werner Kapp said.
He said in a statement the revenue growth demonstrated the group’s resilience.
“As we look into 2024, we have a clear growth strategy… And we are already seeing the positive results of our profit improvement strategy in our two biggest businesses: Netstar and Altron Systems Integration. We remain focused on driving revenue growth and improving operating leverage while investing in our growth businesses,” he said.
The Own Platforms segment grew revenue 14% to R3.25bn, with Ebitda up 5% to R1bn and operating profit down 5% to R521m. Margin pressures in Netstar impacted the performance. Subscriber growth among Original Equipment Manufacturer’s and in Malaysia was up 46% and 80%, respectively.
Altron FinTech grew revenue 22% to R1.04bn while operating income expanded 21% to R233m, with the performance supported by all of its offerings.
Altron HealthTech saw 8% revenue growth to R350m supported by a 23% improvement in the corporate health business, as well as an increase in transaction value. Operating income grew 5% to R96m.
The Digital Transformation segment grew revenue 26% to R2.79bn, supported by revenue growth in Altron Karabina, Altron Security, and Altron Systems Integration. Operating profit was up by 57% to R77m driven largely by the strong performance of Altron Karabina and Altron Security, with the inclusion of Lawtrust for 12 months. Three were margin pressures at Altron Systems Integration.
Within Altron Security, changes in regulations, an increase in supply chain governance and accelerating digital transformation saw revenue rise over 100% to R436m. Excluding LawTrust, revenue increased by 9%.
Altron Karabina delivered 10% growth in revenue to R350m largely due to increased demand in data and analytics, business applications and software services. Operating income of R23m had increased by 44%.
Altron Systems Integration increased revenue 18% to R2bn with an operating loss of R20m due to margin pressures in its software engineering, contact centre, smart manufacturing and operations businesses. In addition, there was R23m in restructuring costs.
The Managed Services segment’s revenue increased 14% to R2.9bn, but the operating loss came to R62m due mainly to the two provisions.
Altron Nexus's R1.03bn of revenue achieved 29% growth, but reported a R136m operating loss due to the two non-cash adjustments.
Altron Arrow grew revenue 34% to R679m while operating profit increased 117% to R50m, with revenue boosted by an increase in product demand, a broadening of the customer base and product-cost inflation.
Nicholas Bofilatos resigned as chief financial officer to move to the Netherlands, joining his wife who took up a job opportunity there. Carel Snyman, with over 29 years senior financial experience was appointed the new chief financial officer.
BUSINESS REPORT