Despite the poor state of the South African economy, Altron said on Monday that it expects to report double-digit revenue growth from continuing operations for the year ended 28 February 2023.

Normalised revenue from continuing operations will rise by between 14% and 24% to between R10.4-billion and R11.3-billion, the group said in a trading update. Total revenue, including from discontinued operations, will rise by between 9% and 19%.

Headline earnings per share will decline by between 14% and 32%, although from continuing operations it will climb by between 8% and 28%.

Ebitda – a measure of operating performance – will lag the growth in the top line, Altron said. Ebitda from continuing operations will be between 1% and 21% higher, and total Ebitda, including discontinued operations, is likely to sag by as much as 10%.

“The variance between the increase in revenue growth and the lower Ebitda growth is largely due to margin pressures in two of Altron’s largest revenue-contributing businesses, Netstar and Altron Systems Integration. Both businesses are implementing their accelerated performance improvement strategies, which are gaining positive momentum in the new financial year,” Altron said.

“The group continues to remain strongly cash generative and is sufficiently capitalised, providing a solid platform to execute the immediate strategic initiatives,” it added.

Highlights of the period include:

Positive momentum from Altron Karabina’s profit improvement strategy, driving an improvement in operating leverage.
Improved hardware sales in Altron FinTech, Altron Managed Solutions and Altron Arrow as product demand intensified.
Altron Security delivered a strong performance, underpinned by increased demand and the acquisition of LawTrust.
Cost management and process efficiencies produced solid performance in Altron Managed Solutions.