Technology group Altron reported a blowout performance in the six months ended August, with its digital transformation segment recording massive profit growth, at nine times more compared to the previous year.
The JSE-listed Altron reported its interim results today, with revenue up by 15% to R5.3 billion. Operating profit before capital items surged by 57% to R255 million, while headline earnings per share rose by 467% to 34c per share.
The company also declared a gross interim cash dividend of 16c per share (12.8c net of 20% dividend withholding tax).
Altron Group chief executive Werner Kapp, who recently took control of the company, comments: “As a group, we delivered 15% revenue growth, operating income growth of 57%, while decreasing our net working capital by R47 million.
“We have some exceptional assets across our business segments that are market leaders in high growth areas. Our performance in the first six months despite tough trading conditions is a testament to that. Altron is an iconic South African company with great assets that can enhance the digital transformation journey of our customers and touch the lives of many South Africans.”
Kapp says Altron sidestepped prolonged macro-economic impediments, including conflict in Ukraine and COVID-19, to tick green on all business units in the period.
“We are not immune to the climate of uncertainty, global supply chain constraints and inflationary pressures that all of us are subjected to daily. The continued global supply chain shortages, which result in longer lead times, inflated prices and a shortage in electronic components impact revenue pressure in our digital transformation segment, resulting in margin squeeze due to increased prices,” says Kapp.
Load-shedding, high inflation and currency depreciation impacted the demand and supply side of Altron’s Netstar business.
In the six months, the digital transformation segment reported revenue of R1.37 billion, which includes the contribution of Lawtrust, acquired in October last year.
This contribution was up 25.7% from the prior year with operating profit of R71 million, representing a growth of nine times compared to the prior year, says Altron.
Altron Systems Integration delivered a 6% improvement in revenue to R933 million and a modest breakeven operating profit of R2 million, as a “result of customers’ reduced capital expenditure, global components shortages giving rise to prolonged lead times, as well as a backlog in hardware sales”.
In the current reporting period, Altron Karabina's software sales delivered a significant performance, contributing to the R171 million revenue and operating income of R11 million − an improvement of 11% and 175%, respectively, compared to the prior year.
Altron notes: “The high licence and software sales attributed to Altron Security's exceptional performance, tripling its revenue to R266 million and growing its operating profit of R58 million six times compared to the prior year.”
In line with other business units, Altron’s own platforms segment recorded revenue of R1.63 billion, a 16% improvement on the previous year.
Netstar's revenue of R909 million is 8.7% up from the prior year; however, Altron says a change in sales mix and increased costs to counter the impact of blackouts due to load-shedding had an adverse impact on profitability.
Altron fintech revenue surged 35.5% compared to the previous year to R542 million, while operating profit of R132 million grew by 71.4%, which Altron says reflected enhanced margins.
In the same period, Altron Healthtech also improved performance, with revenue of R176 million, a 9.3% hike from the previous year.
“A reduction in switching transaction volumes due to lower patient visits to doctors and pharmacies, as well as the adverse impact of load-shedding on doctors’ operating hours, both contributed to a broadly flat operating profit of R43 million for the healthtech business,” says Altron.
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