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Altron declares hefty dividend in half-year results

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Altron Group chief executive Mteto Nyati.
Altron Group chief executive Mteto Nyati.

Altron today announced half-year results ended August, showing a solid performance across its three segments, despite a challenging environment.

The three segments, Own Platforms, Digital Transformation and Managed Services, uplifted the JSE-listed Altron to record double-digit profit growth in the period.

In the six months, the company’s revenue increased by 2% to R3.5 billion, cash generated from operations surged 79% to R527 million and an interim dividend of 7c per share was declared.

Headline earnings per share soared 238% to 11c per share, while operating free cash flow of R81 million was up by more than 742%.

“The benefits of our diverse and high-quality portfolio of businesses operating across the Own Platforms, Digital Transformation and Managed Services segments resulted in Altron delivering an operating profit growth of 71%,” says Altron Group CEO Mteto Nyati.

In the period under review, Altron’s Own Platform segment generated R1.4 billion in revenue, up 6% against the prior year, while the operating income of R251 million grew by 27%.

Altron’s business transformation programme within Netstar South Africa yielded positive operational improvements, which saw the brand reach one million subscribers, representing an 18% growth year-on-year.

Netstar’s revenue of R836 million was a 9% growth on the prior year, which Altron says was supported by the strong performance in Australia.

According to Nyati, Altron Fintech achieved revenue of R400 million in the six months, with its operating profit of R77 million a 75% improvement on the prior year.

Altron Healthtech had revenue of R161 million, and its operating profit of R44 million remained stable.

“The acceleration to digital transformation benefited Altron Security and Altron Karabina, as they aided customers to migrate their platforms into cloud-based solutions and offered enhanced digital security protection in mitigating the increased threat from what we see as our new way of working,” notes Nyati.

Nonetheless, he says, Altron Systems Integration’s revenue of R863 million was down by R186 million on the prior year due to customers holding onto capital expenditure, which adversely impacted the entire digital transformation segment for the financial period.

“This business has been realigned to simplify its offerings to its customers, and right-sized to focus on the identified high growth areas of cloud, data, DevOps and security. This has set the business up to focus on achieving its second-half expectations.”

Further, Altron says, this month’s finalisation of the LawTrust acquisition will enhance the digital security growth area and “contribute to a high-annuity base for Altron Security to go to market with their own IP offering in respect of the Signing-Hub and advanced digital signatures”.

Going forward, Nyati says, having assessed its strategic footprint in Africa, the Altron board decided to disinvest from rest of Africa operations at the end of the first half, and the company will now retain a presence in Africa through a partnership operating model.

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