Earnings jump as Altron completes restructuring


Earnings jump as Altron completes restructuring

Published Date: 2019-05-10 | Source: Stephen Gunnion | Author: Stephen Gunnion

Earnings jump as Altron completes restructuring

The ICT and electronics group lifted full-year earnings by half as a number of its businesses won lucrative private and public-sector contracts.

Altron has wrapped up the sale of its remaining non-core businesses following a restructuring which saw it pay down debt and expand further offshore.

The ICT and electronics group says it's also tracking almost a year ahead of its goal of doubling earnings before interest, tax, depreciation, and amortisation (EBTIDA) by the end of its 2022 financial year.

Full-year earnings were supported by a number of key private and public-sector contracts it secured over the year. These include the Gauteng Broadband Network Phase 2 contract; a tender to provide a secure and protected technology network to the Gautrain; a data and analytics contract with FNB; and a vehicle tracking technology deal with the eThikwini Municipality; amongst others. In the UK, Bytes won a five-year £155 million Windows 10 contract with the National Health Service, while Netstar Australia was awarded a fleet management contract by Ausgrid.

Last July, the group sold its Powertech Transformers business and has since concluded the sale of Altech UEC, its last non-core subsidiary. The ongoing improvement in the performance of the discontinued businesses against the prior year has contributed to the improvement in both earnings and headline earnings per share for total operations. It said results from its continuing operations gave a more accurate measure of its core sustainable earnings.

So, while gross revenue increased by 30% to R19.2 billion over the year to February, revenue from continuing operations rose 7% to R15.7 billion the year to end-February. On the same basis, EBITDA increased by 30% to R1.6 billion. Headline earnings per share jumped 50% to 179c and it's declared a final dividend of 44c per share, taking its total dividend for the year to 72c. It didn't pay a dividend last year.

It reduced net debt to R1.6 billion, from R1.94 billion a year ago.

Its shares rose 5.1% to R21.49 yesterday.

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