JSE-listed Allied Technologies (Altech) will take a hit to its basic earnings, which will drop by at least half, when it reports its full-year results later this month.
The news sent its shares 1.38%, or 76c, down in mid-morning trade, shortly after the announcement was published yesterday, to R54.50. By the end of trade, its shares had recovered and closed 0.02%, or 1c, down at R55.25.
Altech's trading update indicates headline earnings and adjusted headline earnings per share will be between 11% and 16% lower than a year ago, while basic earnings will drop by between 55% and 65%. The company's results will be published on 20 April.
Last year, Altech reported revenue of R9.2 billion and operating profit growth of 7%, to R933 million. Basic earnings per share were 536c, and headline earnings per share were 571c. In December, Altech had warned that growth for the full year was likely to be flat.
Altech says the drop in basic earnings is because it has impaired its East African operations on the back of reduced profit levels, due to adverse trading conditions. The unit also incurred some once-off costs.
The company says some of its subsidiaries are battling “adverse global and local economic conditions, as well as currency volatility factors”. However, the second six months of the year showed “some” improvement on the first half, it says.
At half-year, Altech was hit by “certain adverse specific factors” that weighed on revenue and its operating profit margin. Revenue for the first six months was R7.8 billion, while operating profit was R361 million.
In October, at the time of the results presentation, CEO Craig Venter was confident of reversing the trend in the second half of the year. He said Altech had reported positive growth for the past decade and “I don't intend breaking the record”.
Looking better
Parent company Allied Electronics Corporation (Altron) will fare better in its full-year results. The company's voluntary trading update indicates headline earnings per share will be between 12% and 17% higher, while adjusted diluted headline earnings per share will improve by between 9% and 14%.
Basic earnings, for the year to February, will be impacted by Altech's results and will be between 3% lower and 3% higher. Altech is Altron's biggest operating entity.
Altron says Bytes performed well over the financial year, and has beat expectations, achieving high growth in several areas of its business, mostly due to improved corporate IT spend and market share gains. Powertech, its cable subsidiary, performed mostly in line with expectations, and saw good growth, although this was off a low base.
Altron's full-year results are expected to be published on 4 May. Its share lost 0.86%, or 23c, to R26.40 in mid-morning trade, just after it published the update, before rebounding to close at R26.93, a 30c or 1.13% gain on the day.
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