Bouyed by its security unit, Altron says it unlocked shareholder value, declaring a dividend in its full year results ended February.
The JSE-listed technology solutions group says in the period, Altron’s star performers enjoyed growth in a challenging year, including Altron Security (Ubusha), which recorded a significant improvement from the prior year and contributed positively to the company’s results.
Altron saw invoiced income gain 4% to R7.7 billion, while cash from operations grew 31% to R2.2 billion. It adds that shareholder value was unlocked by 152% from a share price of R20.19 to a share value of R50.80.
“The cost containment measures taken across our operations to minimise the impact of COVID-19 have positioned us well,” says Altron group chief executive Mteto Nyati.
“There is no question that this has been the most difficult and challenging year I have ever encountered as a business leader. Lockdowns significantly reduced economic activity and inevitably impacted on our financial results.”
Nyati lamented the impact of COVID-19 on the business, as it had to adopt new measures to continue operating, instituting remote working arrangements during 2020, which affected half of its staff.
“We were able to move to working remotely with minimal disruption to productivity and processes. The health and wellbeing of our employees led our list of priorities during lockdown, which necessitated an elevated volume of communications and changes to shore up the group’s balance sheet.
“Ultimately, while many companies fell victim to the economic ravages induced by the pandemic, Altron continues to provide jobs for more than 7 000 employees and we did our best to minimise job losses.”
In the period under review, Altron says earnings before interest, tax, depreciation and amortisation declined 8% to R1 billion.
Operating free cash flow of R612 million increased by more than 600%. Cash generated from operations was up 31% to R2.2 billion, while headline earnings per share declined 18% to 31c a share.
The company declared a dividend of 15c per share for the year.
Looking ahead on growth opportunities, Altron says the recently acquired Lawtrust will create end-to-end security capability when combined with Ubusha to form Altron Security, with a presence in the United Kingdom, where its offerings are in demand.
Altron swooped up digital signatures services company Lawtrust from Etion for R245 million, subject to Competition Commission approval.
Lawtrust is a digital trust services and cyber information security solutions firm that provides solutions used to verify the authenticity of digital identities and counterparty systems in transactions, data encryption, digital signatures, as well as biometrics.
It provides services to over 500 customers in the private and public sectors, and is considered one of the leading cyber and information security companies in SA.
The new Altron 2.0 strategy, which builds on the successful implementation of One Altron, resulted in the identification of four key high-growth areas in the information technology sector as part of Altron 2.0, targeting tripled operating income in five years, according to the company.
These growth areas are automation (DevOps), cloud services, data and security, and Bytes UK’s growth is on the back of cloud computing.
“Given that South Africa lags behind the UK on the same trend by three to four years, we believe Altron will reap the benefits of early positioning in the cloud space through Altron Karabina and Altron Systems Integration,” says Nyati.
Turning to other business units, the company says, during the year under review, Altron Document Solutions, Altron People Solutions, Altron Arrow and Bytes UK were classified as assets held for sale.
Bytes UK was demerged with a successful initial public offering on the London Stock Exchange as its primary listing and the JSE as its secondary listing.
Alton notes Bytes UK was included in Altron’s numbers for nine-and-a-half months before it was separately listed, unlocking value for shareholders.
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