JSE-listed technology group Altron has reported a 2% improvement in headline earnings per share from continuing operations but cut its final dividend by 24% to 55c/share to preserve cash amid the economic upheaval created by the Covid-19 pandemic.
For the year to end-February 2020, Altron lifted revenue by 6% to R16.7-billion, while cash generated from operations jumped by 26% to R1.7-billion. Earnings before interest, tax, depreciation and amortisation (Ebitda) rose by 14% to R1.8-billion.
“In light of the current economic upheaval from the Covid-19 pandemic and uncertainty thereof going forward, the company has decided that it would be prudent to preserve cash at this time and to declare a final dividend that is 40% less than would otherwise have been declared,” it said.
It said its medium-term guidance to double five-year Ebitda by 2022 remains unchanged.
“Despite Altron’s resilience, with 62% of its income being annuity based, Covid-19 is expected to have a negative impact of mid-single digits (compared to) last financial year’s revenues,” said CEO Mteto Nyati.
“To limit the impact on profitability, a number of cost-saving initiatives have been implemented for the 2021 financial year, which include cancelling all cash-absorbing projects, freezing recruitment, promotions and salary increases, as well as halving all bonuses for group executive officers, MDs and first-line managers for the 2020 financial year.”
“My executive team and I have continued to embed the culture of collaboration across all our operations, which has enabled us to better service our customers through delivering the full breadth of our expertise, solutions and product offerings,” said Nyati in a statement alongside the results.
“This has led to sizeable contract awards from Bet 365, Prudential, many local and national government organisations in the UK, Standard Bank, Capitec, Coca-Cola Beverages Africa and Barloworld.”
He said the company’s five-year road map under the “One Altron” strategy – designed to prioritise revenue growth, improve profitability, transform the customer experience, and employee excellence – has seen good progress. “We have strengthened the group through the disposal of non-core assets, the rationalisation of operations and the execution of targeted acquisitions in high-growth areas.”
Bytes UK, which Altron is likely to unbundle to unlock value for shareholders, outperformed the market, with Ebitda up by 66% to R611-million. Netstar delivered strong customer growth of 16.5%.
The digital transformation segment (excluding Bytes UK and Nexus) grew statutory Ebitda by 24.1%; managed services by 13.3%; and the healthtech and fintech business delivered growth of 13.3%.
Altron Nexus was negatively impacted by the City of Tshwane municipal broadband network judgment handed down against Thobela Telecoms. The new Nexus management team, meanwhile, returned the business to profitability, delivering an Ebitda of R24-million from a loss of R25-million in the first half. — © 2020 NewsCentral Media