Altron increases profit, says UK growth exceeded expectations
Altron[JSE: AEL] reported 8% growth in revenue from continuing operations to R8.53billion, with headline earnings up 4% for the six months to end-August. An interim dividend of 29 cents pershare 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’spartnership agreement with Toyota and Vodacom, as well as growth in itsAltron Bytes UK operations exceeding its expectations.
Butthe group was also hit by a high court verdict which allowed the City of Tshwane toset a large contract aside. Altron holds a stake in Thobela Telecoms, which wasgranted a contract by the then ANC-led council in 2016 to install a municipalbroadband network. But the incoming DA city government stopped the contractafter it alleged that due process was not followed in awarding it. In itsannual report, Altron said it was owed R301m as part of the project.
Also, three senior executives of its subsidiary Altron Nexus were suspendedafter potential internal irregularities involving procurement. On Thursday,Altron said that the “precautionarysuspension of key executives” remains ongoing. Altron Nexus also saw increasedworking capital demands as a result of large infrastructure projects, the company said.
The integration of Altron Karabina, the Microsoft solutionsbusiness which it acquired last year, was slower than expected. “However, this acquisition remains strategicallyrelevant to the group given their capabilities in the fast-growth cloud and dataanalytics environment.”
By 10:00 on Thursday, its share price was down 1.5% toR26.85 – close to its highest level in five years (R28), reached in July.