Altech subsidiary Bytes Technology Group, which had a tough year, has closed down non-performing units and expects to see benefits as market conditions improve.
Bytes, a wholly-owned subsidiary of Altron after the company bought out minority shareholders about two years ago, saw revenue down a percent. However, its operating margin declined from 7.1% to 6.6%.
The subsidiary accounts for 27% of Altron's revenue, at R5.96 billion, and 25% of net profit, at R157 million.
Tough year
Altech CEO Robert Venter says market conditions in the past 18 months were challenging and, while Bytes managed to hold up revenue, the company came under margin pressure.
Bytes CEO Rob Abraham, presenting his first results after taking over the reins from David Redshaw, who retired earlier this year, said he is proud of the unit's results, despite the tough year.
Although headline earnings per share were down 21%, he assured analysts and investors at yesterday's presentation that this “won't happen again” unless something occurs that is outside of Bytes' control.
Having streamlined the operations, Abraham is targeting growth and wants to cross-sell products across the company's client base. The unit is also targeting geographic expansion in Africa, where it has partners in 27 countries.
Abraham says the March figures indicate the company has beaten its budget and is up year-on-year.
Bitter pill
Abraham says the unit was dragged down by two subsidiaries that underperformed, which knocked about R75 million off the company's profits. “If we put it [the amount] back, and I know we can't, but when you judge the performance, we didn't have a bad year.”
Bytes' UK operation was let down by its Xerox business, which lost R12 million in profit. The specialised solutions unit also made substantial losses, and Bytes has now replaced the management and revisited the business model, says Abraham.
“Once we realised that we had to take some medicine in some companies, we closed underperforming units and streamlined our operations.”
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