JSE-listed technology services firm Altron has put its recently-established artificial intelligence (AI) factory at the centre of its strategy to grow the platform-based business.
So said Werner Kapp, Altron group CEO, yesterday in an interview after the company released its annual financial results for the year ended 28 February.
The firm reported a 25% increase in operating profit to R1.2 billion for the year, after a three-year restructuring drive that tripled headline earnings per share and shifted the group’s focus towards platform-based businesses.
In October last year, Altron announced the successful deployment of South Africa’s first operational AI factory, powered by NVIDIA AI infrastructure, including NVIDIA accelerated computing and NVIDIA AI Enterprise software.
An AI factory is a centralised technology platform that combines computing infrastructure, data, software and artificial intelligence models to develop, train and deploy AI applications at scale.
Companies use AI factories to give customers access to tools such as large language models, while also embedding AI into their own operations, products and services to improve efficiency, automation and data-driven decision-making.
Altron’s AI factory delivers AI infrastructure, tools, training and support, while maintaining data sovereignty and regulatory compliance. The platform is currently live with five launch customers, which include Dataviue, Lelapa AI and MathU.
Building AI everywhere
Kapp said the AI factory was not established as a standalone revenue-generating business, but rather to strengthen both internal capabilities and customer access to local large language models.
“The AI factory was never a separate revenue-spinner but was set up firstly to give our customers access to local large language models and ourselves.”
According to Kapp, the AI factory forms a central part of Altron’s long-term growth plans, as the company expands its platform-based business strategy and embeds AI capabilities across its operations.
“The AI factory is a key part of our growth strategy going forward. Besides having the scaled multi-platform business, we are building AI everywhere in the business and also using data as a competitive advantage, and the AI factory plays a big role in that front.”
Kapp explained that the AI factory has a dual purpose. “The AI factory has two roles – it’s helping our customers as we have a data and AI practice business in our Altron Digital business which is helping our customers get the best out of their AI investments and also helping us to drive our multi-platform business.”
However, he noted the AI factory did not make a significant contribution to revenue during the past financial year, although the company expects it to start contributing in FY27.
Reflecting on the company’s performance over the past three years, Kapp said disciplined execution of strategy had been one of the group’s biggest achievements.
“What is satisfying for us is that we have had a disciplined execution of the strategy that we have driven for the last three years. We have managed to grow all our metrics – revenue, EBITDA and operating profit.
“We’ve been able to reward our shareholders with a special dividend. The fact that we’ve now transformed into a multi-platform company with a healthy balance sheet and high-quality returns is another highlight.”
Kapp said Altron’s platform strategy spans several sectors, including mobility, payments, healthcare and identity services, giving the company diversified exposure across industries.
“We have a couple of companies in our platform, such as Netstar, Altron FinTech and Altron Digital. We’ve got a lot companies that are platform businesses and they very much play in the same area.
“We have a lot of platforms, whether in mobility, payments, healthcare or identity, our platforms service a variety of customers across a number of vertical industries. That’s part of our unique positioning because we are not only exposed to one sector but to a broad spectrum of sectors and consumers.”
Transformative phase
On future growth plans, Kapp said the company has already entered what it calls its “transformative growth” phase, focused on increasing capital allocation towards its platform businesses.
“We are already two-and-a-half months into our transformative growth era, which is about doubling down all of the firm’s capital allocation to the platform business.”
Kapp pointed to the scale of the company’s platforms, including more than two million subscribers on Netstar, over 5 000 SMEs on its fintech payment platform and more than 20 000 doctors on its healthcare platform.
“So, for us, transformative growth is to continue to service those customers. We see the increased digitisation of the South African economy and that is continuing unabated. We see Home Affairs increasingly digitising its services…so we think we are really well-positioned to be able to continue driving sustainable growth.”
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