TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      MTN receives $35-million offer for Afghanistan unit

      11 August 2022

      MTN weathers load shedding storm

      11 August 2022

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      Willington Ngwepe to step down as Icasa CEO

      10 August 2022

      Samsung unveils its latest foldable smartphones

      10 August 2022
    • World

      Gaming industry’s fortunes fade as pandemic ends

      11 August 2022

      Disney tops Netflix in streaming subscribers

      11 August 2022

      Jumia says it’s past peak losses, shares jump

      10 August 2022

      Elon Musk sells $6.9-billion of Tesla to avoid Twitter fire sale

      10 August 2022

      Nvidia issues profit warning on slump in demand for graphics cards

      8 August 2022
    • In-depth

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022

      Webb telescope’s stunning images of the cosmos

      12 July 2022
    • Podcasts

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022

      Demystifying the complexity of AI – fact vs fiction

      6 July 2022
    • Opinion

      SIU seeks to set aside R215-million IT tender

      19 July 2022

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»News»Bytes only performer at Altron

    Bytes only performer at Altron

    News By Duncan McLeod8 May 2013
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Robbie Venter
    Robbie Venter

    The performance of IT services group Bytes was the only bright spot in an otherwise poor set of annual financial results from JSE-listed conglomerate Altron, whose numbers were dragged down by subsidiaries Altech and Powertech.

    Group headline earnings per share declined by 29% to R1,36, from R1,91 in the 2012 financial year. Altron turned in a net loss from the year to February 2013 of R929m, from R79m previously, hurt by losses from discontinued operations of R1,6bn, mainly from Altech’s troubled East Africa operations, the sale of which resulted in the capital loss of R730m.

    Both Altron and Altech, in which the former holds 61,4%, are trading under cautionary notices, with many speculating that Altron plans to make its second attempt in six years at buying out minority shareholders in Altech and delisting the company. It attempted to buy out both Altech and Bytes minorities six years ago, but was successful only in concluding the latter transaction after the Public Investment Corp and other shareholders blocked the former.

    Despite the tough trading environment, Altron managed to increase its revenue for the 2013 financial year, growing it by 7% to R24,8bn from R23,2bn before. It reported a profit from continuing operations of R707m, from R629m previously.

    Altron CEO Robbie Venter tells TechCentral that the disposal of Altech’s East African assets — in a complex deal to Liquid Telecom — will be a “game changer” for the group. “There were operating losses incurred of R205m in East and West Africa that will not recur this year,” Venter says. “That translates to Ebitda of R151m. This should immediately give us the opportunity to see a much improved performance coming through.”

    Ebitda is a measure of a company’s operating profitability with interest, taxes, depreciation and amortisation excluded.

    Powertech also had a difficult year, with headline earnings plummeting by 99% to just R1m, despite a 2% increase in revenue. Powertech’s cables business grew revenue by 5%, but margins collapsed by more than 50%.

    “In the second half, it experienced significantly reduced demand from the formal sector and , while much of the revenue was replaced with informal sector business, this was at significantly lower margins, particularly in the last quarter,” Altron says. “Decreased profitability was exacerbated by the transport strike in September 2012, which had a ripple effect on the entire supply chain.”

    Venter says Powertech will reduce costs in the cable business to address the problems.

    “Powertech is a player in the recovery of the infrastructure and building and construction markets. Both of those markets have been challenged in the past few years, but are starting to show first green shoots of recovery,” he says.

    Unlike Altech and Powertech, Bytes turned in a reasonable performance for the 2013 financial year, lifting revenues by 15% to R7bn, although margin pressure meant Ebitda rose by just 1% to R531m. Headline earnings were flat at R253m.

    “Bytes is doing okay and outperforming some of its big competitors in the IT field,” says Venter.

    Bytes Document Solutions, which represents Xerox in South Africa, grew sales by 6%, but Ebitda declined by 24% due to “difficult market conditions, accentuated by the volatility in the rand.”

    A new division, Bytes Universal Systems, created through the acquisition last year of Unisys Africa, contributed revenue of R231m and Ebitda of R18m over an 11-month period and “performed particularly well in the petroleum and public sectors”.

    Though Venter says there are financially troubled rivals to Bytes — some of them listed on the JSE — it’s difficult to buy listed companies, “especially troubled ones”.

    “The ability to buy a business, where you can feel comfortable that the downsides are protected, is limited. You really have to be sure what you’re purchasing has no gremlins in the closet. You can do a due diligence, but we’ve learnt the hard way that due diligences don’t tell you everything about a company. We will not shy away from opportunities, but the risks are much higher in the public space than the private space.”  — (c) 2013 NewsCentral Media

    Altech Altron Bytes Bytes Document Solutions Bytes Technology Group Liquid Telecom PIC Public Investment Corp Robbie Venter Xerox
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleThe Samsung Galaxy S4 reviewed
    Next Article Kenya’s BRCK: all the details

    Related Posts

    MTN receives $35-million offer for Afghanistan unit

    11 August 2022

    MTN weathers load shedding storm

    11 August 2022

    African unicorn Flutterwave battles fires on multiple fronts

    11 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    How secure is your cloud?

    10 August 2022

    5 ways to make attack-path management more manageable

    10 August 2022

    Smart homes need even smarter Wi-Fi

    10 August 2022
    Opinion

    SIU seeks to set aside R215-million IT tender

    19 July 2022

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.