Altron turnaround takes shape - TechCentral

Altron turnaround takes shape

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The turnaround at long-troubled technology and manufacturing group Altron is picking up pace, with profit from continuing operations in the six months to end-August 2016 improving to R187m from R103m in the same six-month period a year ago.

However, the discontinued operations — mainly the power segment — continued to lose money, albeit at a much slower rate than before (R224m against R721m a year ago).

The group reported a loss for the period from total operations of R37m, from a loss of R618m a year ago.

Continuing operations generated a profit before tax of R253m, double the profits of R126m previously.

Headline earnings per share from continuing operations rose by 10% to 54c, while the headline loss from discontinued operations was 23c, a significant improvement over the loss of R1,13 last year. Total operations swung from a headline per share loss of 64c to a profit of 31c.

Altech Autopage, Altech Node, Altech Multimedia group and the Powertech group were presented as discontinued operations in the last financial year and assets classified as held for sale.

“Management has commmited to a plan to sell these operations in the next 12 months, following a strategic decision to focus the group in certain areas where the board believes it has the resources, competence and skills to leverage a competitive advantage. There has been no change to the composition of the discontinued operations since year-end,” it said.

“During the past year, Altron has continued to make good progress on the strategic repositioning of the group by, among others, reducing its exposure to the manufacturing sector and divesting of non-core assets. As a result thereof, the group is a markedly different entity from what it was 18 months ago.”

Proceeds from the sale of businesses has already helped offset debt to the tune of R1,5bn since the year-end in February, the group said. Apart from the disposal of Altech Autopage and Aberdare Cables, Altron has sold subsidiary Strike Technologies, effective 30 June 2016, sold a property in Menlyn in Pretoria and signed a binding agreement for the sale of Powertech System Integrators. It said it is close to concluding a binding offer for the Powertech Batteries Group.

“Cumulative proceeds of approximately R340m are expected on the closing dates of these transactions, with a further R145m to be realised on a deferred basis,” it said. “We continue to make progress on the disposal of the remaining non-core assets.”

Altron said the disposal of these assets remains management’s main priority to “release capital to further strengthen the balance sheet and enable further investment into the core businesses”.  — (c) 2016 NewsCentral Media

  • The writer holds shares in Altron

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