Altech`s R1bn war chest

Telecommunications, multimedia and IT group Altech is now positioned to take advantage of any acquisitions that may come along.

The company, which yesterday reported revenue growth of 13% in the six months to end-August, will pay a special dividend of R1 per ordinary share in the first week of November.

Revenue increased to R3.3 billion, from R2.9 billion the previous year, while operating profit was up by 16%, to R289 million.

CEO Craig Venter says the company`s "strong balance sheet, coupled with current cash reserves of well over R1 billion, strongly position the group to take advantage of acquisitions, share buybacks and related activities".

Headline earnings per share were up 9% to 197c from 181c in last year`s interim results. "Headline earnings include accounting for a once-off taxation settlement of R9 million, which finalised the contingent liability previously disclosed," said the company in a statement.

Headline earnings per share, stripping out the once-off tax settlement, would have increased by 14%. The company`s net asset value per share is 1 708c.

Altech has also integrated its acquisition of software support company MobiMaster. Venter says the integration "will enable subsidiary Altech Isis Information Systems to provide a comprehensive offering to telecoms network operators and other clients".

The company also acquired the Motoma group`s 30% interest in Altech Alcom Matomo, following the Motoma Group`s review of that investment. Venter says this investment will be reserved for a new black empowerment equity partner in the company.

Agreement in principle was reached for black economic empowerment parties to acquire a 30% interest in Netstar`s fleet management division. "The black empowerment consortium will comprise of a private company, and a trust to be formed by Altech for the benefit of previously disadvantaged Altech employees. Dr Enos Banda, who joined the Altech board earlier this year, owns 56.6% of this private company and will hold an effective interest of 17% in Altech Netstar`s fleet management division."

In the telecoms division - the group`s predominant contributor to earnings - Autopage Cellular posted strong results for the period, contributing to an increase of over 100 000 gross postpaid subscribers across all networks. Autopage Cellular`s total subscriber base, including prepaid, now exceeds 757 000, and the nation-wide franchise network has passed the 150-store mark.

Netstar increased its market share in stolen vehicle tracking and recovery in southern Africa and also saw growth in its fleet management business. "With a subscriber base of over 400 000 vehicles for stolen vehicle recovery and fleet management services, Altech Netstar now covers assets totalling an estimated R45 billion," he notes.

Venter says the Malaysian stolen vehicle tracking and recovery operation is performing well and Netstar`s international expansion through targeted markets, including Africa, is being actively pursued.

Both Alcom Matomo and Alcom Radio Distributors also produced good results during the period under review.

In the multimedia division, Altech UEC Technologies posted "excellent" results, with sales of the MultiChoice dual-view Personal Video Recorder contributing to higher than anticipated volumes for this customer. In its inaugural year, this technology has also generated orders from pay-TV operators in Israel, Brazil, Mexico, Dubai and India.

Within the information technology division, Isis Information Systems recorded good results, with among others the MobiMaster acquisition and a strong marketing relationship with HP auguring well for continued strong performance, says Venter.

"During the period under review, Altech Card Solutions showed excellent growth in its plastic card and personalisation equipment business units. Relationships with local banks remain strong, and opportunities in Africa are emerging as electronic banking gains momentum in targeted markets."

At NamITech, Venter says the full benefits of the re-engineering and cost-reduction exercise are expected to emerge in the second half of the financial year and should result in a return to profitability of the South African operations.

"The company`s prepaid cellular voucher manufacturing facility in Lagos, Nigeria, has proved extremely successful, achieving profitability in its first year of operation. Operating at a capacity of over 33 million vouchers per month, sizeable contracts from MTN, Globalcom, together with contracts secured from other customers, position NamITech West Africa well for the coming year."

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