JSE-listed Allied Technologies (Altech) wants to double revenue in the next three to five years and will expand aggressively through global acquisitions.
The company this morning reported full-year revenue of R9.7 billion, up from R9.2 billion, but operating profit took a hit in the year to February as its East African operations saw profit down from R196 million to R32 million. Operating profit overall went from R933 million to R787 million.
Altech's operating profit margin also lost ground, going from 10.1% a year ago to 8.2%. However, the company increased its dividend payout 5% to 356c a share, despite headline earnings per share dropping 15%, to 488c.
CEO Craig Venter says the company will claw back its operating profit during the current financial year, and end the period back at a 10% operating margin. He says the issues that plagued East Africa are behind the unit and it will return profit of between R150 million to R190 million this year.
East Africa was lower due to its network not being completed, and the market suddenly becoming attractive to other competitors, notes Venter. He says the network has since been completed and Altech has signed a three-year deal to backhaul Bharti Airtel's traffic, which will return the unit to previous levels of profitability.
Venter says Altech will grow revenue at around 10% on an organic basis. However, this isn't good enough for Venter, as he wants 20% year-on-year growth. “It's not inconceivable that in three to five years we will double revenue.”
Altech will grow aggressively through global acquisitions this year, says Venter. It is currently investigating several deals, of which one or two will be significant, he says.
Jeffrey Hedberg, who will take up a position as COO from July, will be instrumental in driving Altech's acquisition strategy, comments Venter. He says there will be acquisition announcements “soon”.
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