Diversified industrial and technology group Altron has reported a 4% improvement in headline earnings per share (HEPS) in the six months ended 31 August 2013, rising from 79c a year ago to 82c in the latest reporting period. This was on the back of an 8% increase in revenue from continuing operations, to R13,4bn.
However, once the one-off effects of the repatriation of a loan from East Africa is excluded, normalised earnings per share rose by 15%. Altron CEO Robbie Venter says that without the once-off, non-operational forex and breakage costs associated with the repatriation of this loan, HEPS would have risen by 15%.
The historical results have been restated to exclude subsidiary Altech’s failed East African operations, which are now treated as discontinued. There have also been restatements in order to implement various accounting standard changes that are effective this year and which have to be retrospectively applied, Altron says.
Altron recently bought out minority shareholders in Altech and delisted the entity from the JSE. Altech and Bytes now fall under the newly created Altron TMT umbrella with the idea of creating synergies between the two in technology, multimedia and telecommunications. The impact of that deal is not reflected in the group’s interim results.
However, Altron says Altech “showed a good recovery”, with subsidiaries Altech Autopage and Altech UEC performing “above expectations”.
On a consolidated basis, the Altron TMT division, consisting of Altech and Bytes, increased revenue by 7%, from R8,7bn to R9,3bn, and normalised earnings before interest, tax, depreciation and amortisation (Ebitda) by 11%, from R616m to R681m. The Ebitda margin improved from 7,1% to 7,3%. Normalised headline earnings improved by 18% to R284m.
Altech Autopage recorded a R125m decline in revenues year on year, although normalised (Ebitda) rose by R17m to R139m. Venter tells TechCentral that a continuing focus at Autopage is on lessening its reliance on the traditional voice telephony market and reinventing itself as a supplier of converged services, focused particularly on data.
“Revenue at Altech Autopage was marginally down as a result of a decline in the voice environment and a clean-up of the subscriber base, but the business increased Ebitda by 14% showing the benefits of its strategy of bundling products and value adding services along with the traditional voice product,” Altron says.
“The average revenue per user (Arpu) has continued to decline, although Arpus on new subscribers are encouraging, while churn is being maintained at industry leading levels.”
Altech Multimedia performed well, with revenue up by 20% and Ebitda by 34%, thanks to increased set-top box sales to MultiChoice, among other factors. It has also started making flat-panel television sets for Samsung. “Additional capacity has been added to the manufacturing facility in Mount Edgecombe in KwaZulu-Natal and a record number of 5m set-top-boxes are expected to be manufactured during this financial year.”
IT business Bytes, meanwhile, turned in a good six-month performance across most of its divisions, with “positive inroads” being made in government business as well as “good progress” with its Africa strategy. Revenue rose by 18% to R4,1bn, from R3,5bn a year ago, while Ebitda was R264m, up by 8,2% from R244m.
Powertech turned in 5% revenue growth, but earnings were hit by reduced margins because of “underperformance” from the Aberdare Cables business, “albeit that this division showed a marked improvement when compared to the second half of the prior year”.
“Overall, the Powertech group’s performance is also much improved from the second half of the prior financial year,” Altron says.
Venter says conditions remain “challenging” for Powertech, but there are signs of a turnaround, especially in the building and construction sector. But, he warns: “We’re not talking about the level of four or five years ago.” — (c) 2013 NewsCentral Media
