Allied Electronics (Altron) expects its full year headline earnings per share (HEPS) to swing to a profit this year, after reporting a loss a year ago. This as Altron continues its strategy of refocusing the group.
Altron said in a business update and trading statement that it expects to report total HEPS for the financial year ended 28 February of between 60c and 80c, compared to the previous corresponding period's loss of 145c.
Basic earnings per share are expected to be a loss of between 40c and 60c, which is an improvement of between 77% and 85% on last year's loss of 259c.
Altron's annual financial results are expected to be announced next week, on 11 May.
Following the recent appointment of new Altron CEO, Mteto Nyati, the group announced the streamlining and simplification of its corporate and executive structures, which will be followed by a full review of its core businesses.
The group says it continues to focus on the disposal of its various non-core operations as going concerns "in order to realise value for shareholders" and expects to complete a number of these disposals in the first quarter of the new financial year.
Altron is trying to revitalise the company after a number of tough financial years, including a loss of over R1 billion in total revenue for the year ended 29 February 2016. Attempts at a turnaround began bearing fruit late last year as the group saw interim headline earnings per share (HEPS) swing from a loss to a profit for the six months ended 31 August, despite revenue decreasing 14% to R11.4 billion.
The group has split its results between continuing and discontinued operations - with the entire Powertech group, Altech Autopage, Altech Multimedia and Altech Node (only relevant for the prior year) to be classified as discontinued operations for reporting purposes.
The JSE-listed company expects HEPS for continuing operations to be between 110c and 120c - which is a 5% to 13% drop compared to the previous corresponding period of 126c. Basic earnings per share for continuing operations will be between 7% and 16% higher at between 112c and 122c.
"Headline earnings per share in the continuing operations have been adversely affected by higher interest charges caused by higher borrowing costs attributed to the continuing operations as a result of the reduction in the expected proceeds from the remaining disposals of the discontinued operations," Altron said.
When looking at discontinued operations, the HEPS for the financial year ended 28 February are expected to be a loss of between 40c and 50c, compared to a loss of 271c a year ago, which is an improvement of over 80%. Basic earnings per share are expected to be a loss of between 162c and 172c, which is over 50% better than a loss of 364c in the previous corresponding period.
In March, Altron announced Nyati would leave his role as MTN SA CEO to replace Robbie Venter at Altron. Venter had been CEO of the company founded by his father, Bill Venter, since 2001 and will remain on the board as a non-executive director.
Nyati started his new job on 1 April and has already made some bold moves by restructuring the executive committee and making a number of posts redundant.
Altron shareholders are so far in favour of the company's new strategy, which will see the Venter family give up control after over 51 years, in favour of an independently managed business going forward.
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