JSE-listed technology group Altron, whose share price has been on an upward tear in the past 12 months, on Monday reported strong profit growth while hiking its dividend by 60%.
Altron reported a more than doubling in its operating profit in the six months to end-August, while earnings before interest, tax, depreciation and amortisation (Ebitda) climbed by 49%.
Headline earnings per share (Heps) of 79c were up more than 100%.
Altron, whose share price has more than doubled in the past year, said the strong numbers were supported by “excellent performance” from the group’s “platforms” segment.
Excluding Altron Document Solutions (which is no longer held for sale) and the ATM business — which “management believes reflects the core performance most accurately” — revenue grew 4%, Ebitda increased 23% and operating profit climbed 29%, with Heps up 50% and earnings per share up 84%.
Altron CEO Werner Kapp said: “The leverage in our platform businesses led to excellent segmental performance as we continued to add scale. Our customer-centric focus and higher margin annuity revenue mix are laying a strong foundation for future performance.”
Top-line pressure
The top line, however, came under pressure as a result of the sale of the ATM business and a decrease in revenue at Altron Nexus. Revenue of R5.1-billion was down 6% compared to the same period a year ago.
Altron said highlights of the latest reporting period included:
- Netstar, which “continued its growth trajectory”, growing connected devices 26% to 2.4 million and increasing subscribers by 21% to 1.9 million. “This translated to a strong financial performance, with revenue growing 11%, Ebitda improving 34% and operating profit increasing 45%.”
- Altron FinTech, which grew revenue by 10%, Ebitda by 54% and operating profit by 63%, driven by an increase in SME customers and the value of debit orders processed in the collections and payments business.
- Altron Document Solutions, which made a positive Ebitda contribution of R30-million, a turnaround from an Ebitda loss of R123-million a year ago.
“Altron invested R330-million in growth capital expenditure during the period, focused on Netstar, Altron FinTech and our systems and platforms,” the group said.
“Altron continues to execute on its strategy to become the leading platform and IT services business in its chosen markets. Despite the tough economic conditions, we have demonstrated our resilience through our customer obsession and innovative solutions, high annuity income base and focus on efficient execution,” said Kapp.
Read: Altron Digital Business formed as three units merged
“We remain on track to achieve our medium-term targets of +19% operating margin in our platforms segment and +7% in our IT services segment. With the inclusion of Altron Document Solutions in continuing operations, together with its successful profit improvement strategy, we have increased our operating profit target for continuing operations to R1.15-billion by FY2026,” he said. — © 2024 NewsCentral Media
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