JSE-listed Allied Electronics Corporation (Altron) is looking for small companies to bolt onto its current operations, as it seeks to drive revenue growth.
The company yesterday presented its results for the six months to August and said revenue declined marginally by 2%, to R11.5 billion, as poor results from Altech and Powertech units slowed growth.
CEO Robert Venter says the strategy moving forward is “revenue, revenue, revenue”. He says the company is well-poised to take advantage of opportunities as it has trimmed its cost base.
Altron's cost reduction initiatives have led to a cumulative saving of about R1 billion since it started focusing on expenditure in 2009.
It generated R926 billion through its operations during the six months and ended the year with net cash of R617 million, down from the first half of last year, when it had net cash of R974 million.
Venter says Altron's balance sheet is strong enough to handle a large business deal, although the company is looking at medium-sized entities. He says Altron can gear up, but would only do so conservatively.
Security Partnership.
Bytes is likely to keep looking for bolt-on acquisitions, but is not expected to do large deals, says Venter. However, he adds, if the right opportunity comes along, the company will take advantage of it.
Powertech is internally focused, but will consider an acquisition if one “comes along”, says Venter.
Altech CEO Craig Venter previously said the company is looking for up to three large acquisitions as small deals require as much effort as large buyouts.
Robert Venter says the company will not expand beyond its three current legs, but will rather build on its current offerings. “We have no plans to start a fourth leg.”
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