During the past six months the continuing operations of JSE-listed Allied Electronics Corporation Limited (Altron) presented a significantly improved performance with a 5%* increase in revenue to R6.8 billion and a 19%* increase in EBITDA to R501million. This growth was driven by the performance of the Group's international operations.
Commenting on Altron's interim results, Chief Executive Mteto Nyati said, "We are working on our goal to deliver consistent double digit growth rates at the EBITDA level. Central to this is our approach to how we sell to our customers. We are placing more emphasis on cross-selling and upselling as one Altron. Furthermore, we want to build on our innovation heritage and leverage our R&D capabilities to deliver solutions that have a positive and meaningful impact on society."
In line with the group's strategic intention to geographically diversify earnings and decrease risk, Altron subsidiary Bytes Technology acquired Blenheim Group and its largest subsidiary Phoenix Software in the UK for £35.9 million. This acquisition will bolster Bytes UK's presence in the value-added reseller segment, making it a significant player in the UK software market.
The Altech Netstar business also acquired vehicle tracking and fleet management firm EZY2C in Australia. This helped bolster Altech Netstar's strong performance during the period under review, with revenue rising 12% and EBITDA up 6%. Consumer gross connections grew by 32% and commercial gross connections by 9%.
These acquisitions are in line with the group's preference for services businesses with strong annuity attributes and higher margin businesses with innovation features.
While the group has a significant footprint on the African continent, it is looking to expand even further and is in the process of appointing a new MD for Africa to drive this growth.
The disposal of the remaining non-core assets remains a priority for the business in order to release further capital to strengthen the balance sheet and enable further investment in the core ICT assets. During the period under review, the group divested some of its non-core assets and continued to reduce its exposure to the manufacturing sector. Net debt is expected to reduce to R1.1 billion on conclusion of all these disposals.
Altron continues to make good progress on its strategy to turn the group into a leading ICT player and growing its international footprint in selected markets. Focus areas for growth going forward are learning and development, healthtech, safety and security and fintech.
*Constant currency information.
The constant currency financial information has been compiled by the directors to illustrate the impact of foreign currency movements on the group's reported financial performance for the six months ended 31 August 2017 for illustrative purposes only. This information is the responsibility of the directors and has not been reviewed or audited by the auditors.
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