Altron has reported a 25% increase in operating profit to R1.2 billion for the year ended 28 February, after a three-year restructuring drive that tripled headline earnings per share (HEPS) and shifted the group’s focus towards platform-based businesses.
Commenting on the FY26 performance, group CEO Werner Kapp says: “We have delivered a strong full-year result in FY26, with EBITDA [earnings before interest, taxes, depreciation and amortisation] of R2 billion, operating profit of R1.2 billion and cash generated from operations of R1.9 billion.
“The operational momentum established in the first half of the year provided a solid foundation for an even stronger second-half performance. HEPS increased by 34% to 239 cents per share and, supported by the strong balance sheet and cash flow generation, the board was able to increase the final ordinary dividend by 44% to 72 cents per share and declare a special dividend of 120 cents per share.”
Altron notes that revenue edged up 1% to R9.6 billion, as 12% growth in the platforms segment offset weaker conditions in IT services.
According to the JSE-listed company, FY26 marks the end of the second phase of the strategy Kapp’s team set out in 2023, which focused on foundational and accelerated growth.
Over the last three years, operating profit has grown at a 34% compound annual growth rate (CAGR), HEPS at a 48% CAGR, and dividends at a 51% CAGR.
Return on invested capital has jumped from 7% to 23% since FY23, reflecting disciplined capital allocation and a portfolio repositioning towards high-quality, platform-based businesses.
Capex investment
Altron has invested more than R1.8 billion in growth capex over the three-year period, primarily in its platform businesses, and ended FY26 with R1.3 billion in cash and over R1 billion in undrawn facilities, providing substantial flexibility for continued organic and selective inorganic growth.
“We have built a strong foundation and established a track record of execution,” Kapp says. “As we enter our next phase − transformative growth − Altron has transformed into a multi-platform company, uniquely positioned to drive sustainable growth in South Africa’s digital economy, supported by an ungeared balance sheet and a higher-quality, annuity-driven earnings base.
“I am excited by the growth opportunities for our platform businesses in a market underpinned by digitisation in mobility, payments and identity − areas where Altron has years of experience, meaningful scale and embedded infrastructure. Our focus continues to be to invest in and expand these businesses, execute on our strategic objectives and sustain a resilient, diversified earnings base.”
According to the company, Altron FinTech was the standout performer in FY26, delivering an operating profit of R561 million − up 33% year-on-year and representing more than a doubling of operating profit over three years from R233 million in FY23.
Strong operating margins of 37% and annuity revenue of 88% of total revenue underpin the quality of earnings, says Altron. It adds that the collection and payment platform saw debit order volumes and values grow well over 25%, while point-of-sale device rentals more than doubled to over 30 000, driving annuity growth.
The company notes that Netstar crossed the R1 billion EBITDA threshold for the first time, delivering 16% EBITDA growth with margins expanding 256 basis points to 44%.
Netstar’s subscriber base grew 9% to 2.2 million, with enterprise customers growing 19% and churn (excluding OEMs) falling from 19% to 16%. The South African business delivered 17% year-on-year EBITDA growth, with an EBITDA margin of 49%.
Altron says Netstar has grown its subscriber base from 1.38 million in FY23 to 2.2 million, a 17% CAGR over three years.
Altron HealthTech increased operating profit by 19% to R143 million, with annuity revenue rising to 96% of total revenue.
The direct private practice network delivered high single-digit growth, with more than 2 000 new practices added during the period. The adoption of data-driven services continues, particularly with the launch of the patient app in Altron’s oncology platform.
Recovery efforts
Altron Digital Business faced headwinds in FY26, with revenue down 8% and a loss-making first half. Altron explains that decisive management intervention delivered a profitable second half, with the business closing the year with an operating profit of R7 million and a stronger pipeline. Recovery remains ongoing, with performance sensitive to broader conditions in the IT services market.
Altron Security grew revenue 4% to R411 million and operating profit 5% to R90 million, supported by its annuity-based platform and digital signing businesses, which comprise 80% of revenue. The long-term opportunity in digital identity and public key infrastructure remains compelling, it states.
Altron Document Solutions achieved an operating profit of R98 million in FY26 − up 61% year-on-year and a remarkable recovery from an operating loss of R97 million just two years prior. Software and digital solution sales more than doubled, reflecting the successful transition to higher-margin managed services and decisive operational leadership.
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