Altron has decided to sell its poorly performing video-on-demand and home automation platform, the Altech Node, and is in the advanced stages of discussions with an unnamed third party to dispose of the product.
Altron subsidiary Altech launched the Node to great fanfare in 2014, but sales have proved to be disappointing.
News of Altron’s plans to dispose of the product come just two months after the group said it remained committed to its success.
In May, group CEO Robbie Venter said that despite “lower than expected take-up” of the Node set-top box, it was exploring new opportunities that would improve its market share. The group said at the time that it was “well advanced in terms of exploring alternative opportunities and routes to market” for the Node, despite disappointing retail take-up.
But on Wednesday, Altron told shareholders that as a result of the poor take-up by consumers, it was in talks to dispose of the Node to a third party. “It is anticipated that the Altech Node will be disposed of in the short term,” it said.
The decision comes after the product’s champion, Robbie Venter’s brother Craig Venter, leaves the group after 27 years of service.
Altron warned shareholders on Wednesday that the group will turn in a terrible set of results for the six months to 31 August 2015.
“Shareholders are advised that a reasonable degree of certainty exists that the company’s basic earnings per share … are expected to be more than 160% lower (a loss of at least 35c) as against the previous corresponding period (a profit of 58c), though various impairment reviews will only be concluded closer to the end of the half-year period,” it said.
“Headline earnings per share … are expected to be more than 150% lower (loss of at least 36c) as against the previous corresponding period (a profit of 72c),” it added.
It blamed difficult trading conditions, reduced demand from some key customers and negative conditions associated with manufacturing in South Africa.
Although the IT businesses “remain stable and are delivering broadly in line with expectations”, four areas have prevented the group from improving its financial performance.
These are Altech Autopage, whose subscribers are in the process of being sold to the mobile operators; Altech UEC, which has been hit by delays in digital migration in South Africa and lower set-top box orders in the rest of Africa; the Altech Node’s failure; and poor performance at Powertech Transformers.
A rationalisation of various Altron group head offices is underway to create a “leaner corporate structure and significantly reduce corporate overheads”.
Altron said it intends publishing its interim results on 7 October. — © 2015 NewsCentral Media
