JSE-listed Altron says that, while it anticipates strong growth for the full year, this may be slower than growth seen in the first half.
Deregulation and growth opportunities in the telecoms sector are expected to aid it in its growth targets.
"Given a stable macro-economic environment, the board anticipates posting strong growth for the full financial year, although possibly not at the same rate as that reported for the first half," it told shareholders yesterday.
In its interim results to end-August, the company reported a 20% increase in revenue to R8.3 billion, from R7 billion. Operating profit increased 42% to R711 million from R502 million.
Headline earnings per share moved up 52%. The company has cash-on-hand and equivalents of R1.5 billion. The results, said an analyst, are within expectations.
Altron anticipates that the landscape of the local telecoms sector will "change significantly" on the back of mobile number portability and the Electronic Communications and ICASA Amendment Acts.
Growth beckons
"The establishment of the second national operator, as well as the convergence that is taking place throughout the entire telecommunications spectrum, will provide new business opportunities in this sector.
"The continued expansion in the mobile arena, particularly in Africa, provides opportunities for our mobile infrastructure focused companies in the Powertech group, as well as for the supply of SIM cards and vouchers in the Altech group," it said.
However, demand for secure cards was down as a result of a slower-than-expected adoption of the Europay/Mastercard/Visa standard in the local banking environment. Altron expects that the standard should be adopted in the first half of next year.
CEO Robert Venter said he was pleased with the results: "These results reflect a substantial operating margin improvement to 8.5% from 7.2% in the prior period with Altech, BTG and Powertech all improving operating margins."
He added that improved operating efficiencies and cost reductions, which have been a focus over the last 12 months, combined with the closure of certain loss-making operations in the prior period also added to the margin improvement.
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