Allied Technologies (Altech), which is sitting on a cash pile of almost R1.5 billion, says it is eyeing several acquisition opportunities.
The JSE-listed telecoms, multimedia and electronics-focused group yesterday reported an attributable profit of R364 million for the year to February, a 14% increase on the R319 million of the previous year.
This was on the back of a 9% increase in revenue from R5.55 billion to R6.04 billion. Operating income of R485 million before goodwill impairment and capital items compares with a previous R491 million profit.
Headline earnings rose 12% from 338c a share to 379c a share, while basic earnings per share were 16% up at 373c, compared with 319c previously.
Cash generated by operations amounted to R581 million and cash holdings at the end of the period amounted to just shy of R1.5 billion, compared with R564 million at the end of August.
During the year the group disposed of its joint controlling stake in Botswana holding company Econet Wireless Global, for $87.5 million, realising a profit of $17.5 million plus interest.
"Altech has substantial cash resources as well as other resources to fund future acquisitions," says CEO Craig Venter. "A number of acquisition opportunities are currently under investigation."
The group recently backed away from making a bid for JSE-listed Prism, saying it did not want to be involved in a bidding war. Prism is in the process of being acquired by Net1 Applied Technologies SA.
This week it announced that Altech ISIS had acquired French company MobiMaster for an undisclosed sum.
While most of the group`s operations performed well, Venter says the local operation of Altech NamITech, a smart card and magnetic stripe card provider, was hit hard by continued rand strength, pricing pressures and management issues.
"A re-engineering process and significant cost-reduction exercise are under way to reposition this company as a highly competitive player in its sector," he says.
He adds that the development of secure payments solutions and impending roll-out of bank smart cards in SA are expected to contribute significantly to the operation`s future success.
Venter is bullish on Altech`s prospects. "With an increased order book, growing annuity income expected - especially from the Altech Autopage and Altech Netstar operations - as well as opportunities in an increasingly liberalised and deregulated telecoms market, complemented by acquisitions, we are confident of continued real growth in the new financial year," he says.
A dividend of 209c per share has been declared, up from a 174c dividend for the previous year.
The Altech share closed 50c or 0.9% up at 5 850c on the JSE yesterday. At 9.17am today the share was trading at 5 800c.
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