Altron impacted by Bytes demerger

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Altron impacted by Bytes demerger

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Published Date: 2021-04-29 | Source: Stephen Gunnion | Author: Stephen Gunnion

Altron impacted by Bytes demerger

The technology group will report lower headline earnings after it unbundled the UK business to its shareholders.

Altron will report a big rise in full-year earnings after it listed its Bytes UK subsidiary on the London Stock Exchange. However, headline earnings will be lower as a result of the demerger.

In a trading statement, the technology group said basic earnings for the year to 28 February would be in the range of R32.56 to R32.70 per share, up from R1.75 last year. Headline earnings per share (HEPS) were likely to decline by between 21% and 29% from the R1.74 previously reported.

Altron listed Bytes, an IT software and solutions group, in December in an attempt to unlock value for shareholders and streamline its operations. It believed the true value of Bytes wasn't reflected in its share price. Bytes UK was a standout performer in the six months to end-August, growing revenue by 23% to R4.78 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) by 51% to R459 million, helped by the weaker rand and increased demand for its products and services as more people worked from home during the lockdown.

It achieved an offer price of 270 pence per share ahead of the listing. Its shares are now trading around 500p on the LSE. On the JSE, they've risen from around R68 when they listed to almost R100.

Last week, Altron declared a special dividend of 96c per share. While it retained about 9% of the convertible notes in Bytes that were issued to Altron shareholders following the unbundling in order to settle the dividends tax that arose, it said it had overestimated the tax liability and so decided to return the cash to its shareholders.

Altron's results are scheduled for release on 17 May. Its shares closed 1.9% up at R11.60 yesterday.





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