Altron set to return to profit - TechCentral

Altron set to return to profit

Altron CEO Robbie Venter

Altron CEO Robbie Venter

Troubled technology and industrial group Altron said on Monday that it expects to return to profitability for the six months ended 31 August 2016 as a restructuring starts to bear early fruit.

It said in a trading statement that it expects to report headline earnings per share of at least 1c for the half-year period, from a loss of 64c (on a total earning basis) in the same period in 2015. Basic earnings per share are also likely to be positive, from a loss previously of R1,51.

It warned, however, that the numbers could be affected once various “impairment reviews” have been concluded. A further trading statement will be released in due course, once there’s greater clarity on the likely earnings performance, it said.

The group, which owns businesses such as Bytes and Altech Netstar, said it has continued to make progress with the implementation of its new strategic direction, which is being led by CEO Robbie Venter and his father, chairman and founder Bill Venter.

“This has included the successful disposals of Altech Autopage Cellular to various of the South African mobile network operators, as well as the sale of a majority equity interest in Aberdare Cables to Hengtong,” Altron said in a statement to shareholders.

“In addition, and as a result of several other disposals concluded throughout the Altron group during the intervening period, Altron has managed to apply approximately R1,5bn of proceeds to reduce its historical debt to more acceptable levels,” it said.

It added that it continues to explore “various opportunities to further reduce its exposure to the manufacturing sector in South Africa and refocus on its identified core businesses” in the information and communications technology sector.

It said its core technology businesses have produced a “stable performance” in the half-year period, despite “challenging macroeconomic conditions”, and will post results for the first six months in line with expectations.

“The performance of the core operations has been assisted by the realisation of expected head office cost savings,” it said.

However, the non-core businesses – mainly in the manufacturing sector – have continued to perform poorly. One bright spot, though, has been decoder manufacturing business Altech UEC, which is expected to be Ebitda positive in the half-year period as a result of “certain management interventions”. (Ebitda is short for earnings before interest, tax, depreciation and amortisation and is a measure of operating profit.)

“These factors have resulted in a significant reduction in the losses generated from the discontinued operations,” Altron said.

It said it expects to publish its interim results on 19 October.  — © 2016 NewsCentral Media

  • The writer holds shares in Altron

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