The slowdown experienced in the global economy, as well as the recent US attacks, have made buying patterns difficult to call, but Allied Electronics (Altron) remains confident that it can still show growth for the full year.
"The South African, and especially the international economies, started to lose momentum during the period under review with growth in gross domestic product decreasing and international telecoms and IT markets experiencing significant weakness," says the Altron board, now under the leadership of Robert Venter.
However, the group still showed growth for the period. Over the last six months the group achieved revenue growth of 25.8% from R4 billion to R5 billion with headline earnings per share up 12% from 45.8c to 51.3c.
Operating income increased by 8.8% with all listed subsidiaries contributing improved earnings including a positive headline earnings contribution from the restructured BTG operation.
The balance sheet remains strong with cash and cash equivalents exceeding R1 billion.
All divisions of the group showed growth for the six months to August, although management says Powertech is feeling the pinch since the US attacks with some telecom contracts being put on hold or cancelled.
Altech still accounted for the greater part of headline earnings (63%), while restructured Bytes Technology contributed 11%, enjoying a positive six months and turning in headline earnings per share of 14.26c, compared with a loss for the comparable period.
"In the light of the potential effect that the recent tragedy in the US might have on global economies, accurate forecasting has become even more problematical and there could be an impact on some of our businesses," says the group.
"International technology markets have also deteriorated and recovery is not anticipated until late 2002 or 2003.
"Notwithstanding the above, management remains confident that the group is well positioned to improve headline earnings compared to that of the previous period."
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