Altron expects full-year headline earnings to swing from a profit to a loss. The technology group warned shareholders of the earnings drop after close of market yesterday.
Altron warned headline earnings per share {HEPS) for the financial year ended 29 February are expected to be a loss of more than 90c, compared to a profit of 93c a year ago. The company also expects a basic loss per share of over 170c, compared to a loss of 3c a share the previous financial year.
The Altron share price was R4.65 at the close of trade yesterday. The stock has dropped over 71% in the last year and around 25% since January.
Since the release of Altron's interim results last October, the group says its core IT and technology businesses have continued to perform well "in what are challenging macro-economic conditions" and are expected to post results ahead of expectations.
The company's interim results were also less than desirable as it reported a basic loss per share of 151c and a headline loss per share of 64c.
"The non-core businesses, which predominantly operate in the manufacturing sector, have continued to experience the same difficult trading conditions as in the first half. The recently worsened situation in the South African economy further compounds the challenges these businesses are facing."
However, the company says it continues to make pleasing progress regarding the implementation of its new strategic direction, announced last April.
"This has included, among others, transitioning from a family-managed business to an independent management structure and identifying non-core assets for disposal."
Altron says an important development in this regard was the approval of the sale of the Altech Autopage subscriber bases by the Competition Tribunal, with the transaction becoming unconditional. Another key move was Altron's announcement last December of the sale of the majority of its equity stake in Aberdare Cables, the due diligence of which was recently signed off by the purchaser.
"Various other initiatives to further reduce the Altron group's exposure to the manufacturing sector as well as the current debt levels are being pursued, and announcements in this regard will be made in due course," it said in a statement.
The company renewed a previous cautionary announcement released on 1 February advising investors it remains "in discussions and negotiations", which may have a material effect on securities if successful.
Altron's annual financial results are expected to be announced on 18 May.
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