Altech will not give up on the idea of pursuing international acquisitions, despite the financial disaster it that has unfolded for it in East and West Africa in recent years. However, the JSE-listed technology group will take a breather before pursuing new deals, says CEO Craig Venter.
On Wednesday, Altech turned in a full-year operating loss of R1,2bn on the back of a R1,6bn loss from discontinued operations, which included its troubled businesses in East Africa. Headline earnings per share for the 12 months to 28 February 2013 fell by 23% year on year.
Venter says that in light of the “bad experience” in East Africa, Altech will exercise much greater caution – it would “dot the i’s and cross the t’s” – before doing another big transaction. However, the problems in East Africa, which Venter blamed poor management, plummeting bandwidth prices and other factors, should not deter Altech from doing deals in future.
“Altech has been listed for 40 years and has been built on the basis of its acquisitive nature,” he tells TechCentral. “It’s always been an entrepreneurially based culture and growth has comes through acquisitions.”
He adds: “We would have a guarded approach in terms of globalising, but we are not going to dampen our enthusiasm for following our entrepreneurial instincts that have served us well in the past. We are letting the dust settle … and you’re not going to see us running out and deploying huge amounts of cash. We will [consolidate] over the next six to 12 months.”
In January, Venter announced that Altech would sell its East African businesses in a complex deal that resulted in fibre-optic telecommunications operator Liquid Telecom taking over the assets. As part of the transaction, Altech has taken an 8,6% stake in Liquid and has a seat of the company’s board.
On Thursday afternoon, Altech’s share price was trading down by 4,1% on the back of the publication of the poor 2013 financial results. The decline came on top of a more than 4% slide in the shares on Wednesday, despite talk that parent Altron may soon move to buy out minority shareholders in Altech and delist the group from the JSE. Both Altron and Altech are trading under cautionary notices in terms of which shareholders are warned to exercise caution in dealing in their respective securities.
Altech traded at a new multi-year low of R34,01/share in intraday trade on the JSE on Thursday. The counter has shed almost a third of its value in the past year. — (c) 2013 NewsCentral Media
