JSE-listed technology and telecommunications group Altech has warned its profits in its financial year to 28 February 2011 will take a hit, in part as a result of poor economic conditions and a write-down in goodwill related to acquisitions in East Africa.

The group, led by CEO Craig Venter, says its headline earnings per share are expected to decrease by between 11% and 16% compared to its 2010 financial year.

Basic earnings per share are expected to take a much bigger knock, falling between 55% and 65% over last year.

“Trading conditions in certain of Altech’s subsidiaries have been negatively affected by adverse global and local economic conditions, as well as currency volatility,” Altech says in a statement to shareholders.

It says the second half of the 2011 financial year showed “some improvement” over the first six months of the period.

“The reduction in basic earnings per share is mainly attributable to impairments of goodwill, principally in respect of Altech’s East African operations, reflecting their current reduced profit levels … and certain once-off costs which were incurred during the financial year.”

Meanwhile, Altech parent Altron has fared better in the same period. In a separate statement, Altron says its Bytes subsidiary, which plays in the IT services market, performed well in the 2011 financial year, exceeding expectations and achieving high growth in several areas of its business. The growth is as a result of improving corporate IT spend and market share gains.

Altron’s Powertech business has performed “broadly in line with expectations, achieving good growth, albeit off a low base and despite market conditions in the building and construction sector remaining subdued”.

Altron expects headline earnings per share for 2011 to rise by between 12% and 17%; basic earnings per share will be between 3% lower and 3% higher. — Staff reporter, TechCentral