JSE-listed Allied Electronics Corporation Limited (Altron) has announced it will restructure its business, following a R60-million loss.
The group announced its annual results for the year ended 28 February 2015, reporting a revenue decreased of 1% to R27.6 billion and ebitda decreasing by 23% to R1.4 billion.
Headline earnings per share (HEPS) declined by 50% to 94 cents, while the group reported a total operating loss of R60 million – from an operating profit of R775 million the year prior.
This includes an operating loss from continued operations of R26 million, and a loss from discontinued operations of R34 million, Altron reported.
According to the group, the business was adversely affected in terms of profitability across most of its major divisions.
Altron CEO Robbie Venter admitted that tough decisions need to be made to improve Altron’s performance.
“We need to focus and streamline our group which will mean selling off some non-core assets and adapting our offering to our customers. We are certain that these steps, which will be taken in the near future, will benefit our stakeholders,” he said.
The group said it has been decided that the company will commence transitioning from a family-managed business to an independent management structure.
“The board will make further announcements in this regard in due course,” it said.
Goodbye Altech Autopage
Altron TMT, which comprises Altech and Bytes and other groups, also struggled, the group said.
Notably, Altron announced on 12 May that it was in advanced stages of selling off the GSM subscriber base of Altech Autopage – as the business had been adversely affected by ongoing mobile termination rate reductions.
The non-GSM part of the business will be retained and housed within other operations.
However, the decision was taken to dispose of the majority of the Altech Autopage operation during the year and, as a result, this business has been classified as a discontinued operation.
“Management has committed to a plan to sell this operation in the 2016 financial year, following a strategic decision to focus the group in certain areas where the board believes the group has the resources, competence, and skills to leverage a competitive advantage,” it said.
Other businesses within the telecommunications division of Altron TMT, such as Altech Netstar, performed better.
Netstar has developed new telematics and fleet products; Bytes Systems Integration expanded its biometrics offering; and Altech Radio Holding performed well off the back of the Gauteng Broadband Network contract.
The group’s new VOD product, Altech Node, saw sales that fell below expectation.
“Although we acknowledge it is a start-up business which still has the potential gain traction, initial sales of the Altech Node to the retail market were below expectation.”
“Altron TMT is well advanced in exploring alternative opportunities and routes to market for this product,” said Venter.