Altron has reported a 13% increase in operating profit from continuing operations to R622 million for the six months to 31 August, driven by growth in its platform businesses and a recovery in its IT services division.
The JSE-listed technology group increased revenue by 5% to R5.06 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 16% to R1.09 billion, compared with the corresponding period last year.
Headline earnings per share increased 14% to 109 cents from 96 cents, while earnings per share climbed 14% to 96 cents. The interim dividend was raised 15% to 55 cents per share.
Cash generated from operations increased 32% to just over R1 billion, compared with R762 million in the previous corresponding period.
“HY27 represents a strong start to our ‘Transformative Growth’ strategy and reflects continued execution against the priorities outlined at our ‘Capital Markets Day’,” says Group CEO Werner Kapp.
“The group delivered its strongest interim top-line growth in three years, while continuing to improve the quality and predictability of earnings through a higher annuity revenue mix and strong cash generation, which increased 32% to just over R1 billion,” says Kapp.
“This allowed the board to increase the interim dividend by 15%, while maintaining the flexibility to invest behind our growth opportunities.”
Altron’s three business segments recorded revenue growth, with platforms increasing 8%, IT services 4% and distribution 35%.
The platforms division remained the group's biggest earnings contributor, accounting for more than 95% of operating profit. Its annuity revenue increased 11% to R2.2 billion, representing 92% of segment revenue, compared with 82% three years ago.
“Our platform businesses operate in markets underpinned by the digitalisation of mobility, payments and identity, including increased digital adoption in the informal economy,” Kapp says.
“Our multi-platform ecosystem remains highly-relevant, benefitting from long-term growth trends that continue to outpace the broader South African economy. Revenue growth is a key focus across the group, and we continue to see attractive opportunities to invest behind our platforms, particularly Netstar and Altron FinTech.”
Altron FinTech was the group’s largest operating profit contributor, increasing revenue 14% to R858 million and operating profit 17% to R300 million. EBITDA rose 18% to R324 million.
The business recorded 14% growth in both the number and value of debit orders processed, while point-of-sale device rentals increased 61% to more than 30 000.
Netstar increased revenue 6% to R1.3 billion, with annuity revenue growing 11% to R1.2 billion. EBITDA rose 15% to R619 million, while its subscriber base increased 8% to 2.3 million.
Altron says the vehicle tracking and fleet management business is focusing on platform modernisation and customer acquisition during FY27, with its AI capabilities increasingly being used to improve productivity and automate processes.
Altron HealthTech recorded 2% revenue growth to R205 million, but EBITDA increased 13% to R76 million, with its margin expanding to 37.1%.
IT services returns to growth
In IT services, Altron Digital Business continued the recovery it began in the second half of FY26, increasing revenue 8% to R1.6 billion.
The business returned to profitability, recording EBITDA of R32 million against a loss of R32 million a year earlier. Operating profit improved to R22 million from a loss of R42 million.
Altron attributes the improvement to stronger leadership, improved sales execution and a more agile operating model, which it says has supported order intake and contract renewals.
Altron Security, however, recorded an 18% decline in revenue to R207 million, while EBITDA fell 53% to R37 million.
The group attributes the decline to the timing of software revenue recognition in its identity and digital signing platform business, with the revenue expected to be recognised in the second half of FY27.
The business completed the deployment of Zambia’s National Public Key Infrastructure during the reporting period, providing infrastructure for digital identity, digital signatures and secure online services.
Altron Document Solutions increased revenue 4% to R722 million, while EBITDA grew 30% to R60 million and operating profit rose 45% to R48 million. Growth was supported by managed services, digital workflows and AI-enabled software and support services.
In the distribution segment, Altron Arrow returned to growth, with revenue increasing 35% to R388 million and operating profit rising 33% to R24 million. The business also recorded a positive book-to-bill ratio for the first time in two years.
AI factory expands
Altron says its AI factory, launched a year ago, has deployed more than 100 AI-enabled use cases across the group, with more than 100 developers building solutions through the initiative.
“The AI factory is an important enabler of our Transformative Growth Strategy, and adoption has exceeded our expectations,” Kapp says.
“Our focus is first on realising value inside Altron, through productivity gains, cost optimisation and better customer outcomes, and on getting more value from the platforms, data and customer ecosystems we have built.”
The group invested R447 million in capital expenditure during the period, 91% of which was allocated to growth projects.
Despite returning R755 million to shareholders in June through its FY26 final and special dividends, Altron ended the reporting period with net cash of more than R800 million.
“Our strong balance sheet, improved earnings quality and disciplined capital allocation framework provide the flexibility to invest behind long-term growth opportunities, support shareholder returns and continue strengthening the group's multi-platform ecosystem. This gives us confidence in the group’s medium-term growth prospects,” says Kapp.
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