Altron reports 6% revenue growth

JSE-listed technology company Altron has announced an increase in EBITDA of 14% to R1.8 billion in the year to end February, while revenue increased 6% to R16.7 billion during the same period.

Headline earnings per share from continuing operations were up 2% to 182 cents while basic earnings per share increased by 4% to 184 cents.

In light on the current economic upheaval from the Covid-19 pandemic and uncertainty thereof going forward, Altron said it will preserve cash by declaring a final dividend that is 40% less than would otherwise have been declared.

Altron’s medium-term guidance to double five-year EBITDA by 2022 remains unchanged.

Group chief executive Mteto Nyati said: “My executive team and I have continued to embed the culture of collaboration across all our operations which has enabled us to better service our customers through delivering the full breadth of our expertise, solutions and product offerings.

“This has led to sizeable contract awards from Bet 365, Prudential, many local and National Government organisations in the UK, Standard Bank, Capitec, Coca-Cola Beverages Africa and Barloworld. Our overall customer Net Promoter Score improved to 46% up 10ppt.”

Despite low economic growth in South Africa and Brexit concerns in the UK, Altron’s operations continued to deliver growth. Bytes UK, which Altron is potentially unbundling to unlock value for shareholders, outperformed the market, with an EBITDA up by 66% to R611 million.

Netstar delivered strong customer growth of 16.5%. During the year, Netstar announced the launch of its global connected-car partnership with Toyota and Vodacom, rolling-out connectivity features and in-car WiFi on all new Toyota and Lexus models. This partnership positions the business well to grow further in the Smart IoT space.

“We have seen an increase in interest from customers for more resilience in their remote information technology capabilities. As a key supplier of IT services into a market that needs greater security, resilient remote working capabilities and hybrid cloud, together with a revenue base that is 62% annuity income, this will provide a defensive platform to weather the Covid-19 storm.”

Nyati said that Covid-19 is expected to have a negative impact of mid-single digit on last financial year revenues.

To limit the impact on profitability, a number of cost savings initiatives have been implemented for the 2021 financial year which include cancelling all cash absorbing projects, freezing recruitment, promotions, and salary increases as well as halving all bonuses for group executive officers, managing directors and first line managers for the 2020 financial year, the company said.

For the current financial year, Nyati said Altron will focus on converting the cloud computing pipeline projects of Altron Karabina into revenue in South Africa, improving the profitability of Altron Nexus, integrating Ubusha into the group, and capitalising on the digital transformation agenda to meet customer needs through offering a One Altron solution.

“We will also assess prevailing market conditions to forge ahead with the unbundling of Bytes UK at the most opportune time.”

Read: Altron to demerge and separately list Bytes UK

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Altron reports 6% revenue growth