SA tech stocks: 6 months in

In the past six months we’ve seen the rand weaken to 4 year lows against the dollar, political scandals erupt around the department of communications, all while telecoms and technology continue to spread across the country.

How have South Africa’s tech companies weathered these turbulent times?

Below, BusinessTech takes a look at the best and worst performing tech shares trading above double-digits (above R10) on the JSE over the past six months.

Company Share price at 3 January 2013 Share Price at 25 June 2013
% Change
EOH 37.00 53.48 44.54
Naspers 556.23 681.00 22.43
Pinnacle 18.96 22.65 19.46
Altech 38.57 45.25 17.32
Datatec 50.27 55.17 9.75
Telkom 17.14 16.55 -3.44
MTN 176.75 168.54 -4.64
Altron 21.01 19.50 -7.19
Reunert 76.00 65.00 -14.47
Vodacom 129.20 103.14 -20.17

Share prices taken at close of the JSE on Tuesday 25 June 2013

All featured telecoms shares (Vodacom, MTN, Telkom) on the JSE experienced a drop in share price – though Telkom’s shares have recovered from dangerous lows (R11.93) seen earlier in the year, as new CEO Sipho Maseko takes the reins.

Altech, after facing a turbulent period where it was struggling to offload its East and West Africa operations, saw its shares improve when parent, Altron, put in a bid to buy 100% of the company.

Altron, which already owns a 61% stake in Altech, made an offer to pay R47.50 in cash for every Altech Share. Altech shares are currently priced at [] on the JSE, and the company is expected to delist at the end of July 2013.

The top – EOH

IT services company EOH has continued its winning streak on the JSE, having boosted its share value over 44% since the start of the year.

EOH is a provider of enterprise applications, technology, outsourcing, cloud and
managed service solutions.

In March, EOH reported a lift in revenue for the six months ended January 2013, to R2.39 billion, from R1.64 billion before, while profits were also up for the period to R163.53 million, up 53.5% from R106.52 million in 2011.

In its reporting, EOH showed growth across the board, further attributing its strong performance to its acquisition strategy – which included Siemens IT Solutions and Services South Africa – as it expanded further into the public sector.

EOH’s shares were trading at R53.48 at the close of play on the JSE on Tuesday (25 June 2013), giving it a market cap of R5.674 billion and a P/E ratio of 17.97.

The bottom – Vodacom

South Africa’s largest mobile operator, Vodacom Group, has seen its share value drop by 20.17% over the past 6 months.

The most recent drop in share price is as a result of profit-taking after the company paid out a R4.20 dividend following its annual results.

In May the group reported a marginal increase in service revenue for the year ended March 2013 to R59.33 billion, from R58.245 billion in the prior period. In South Africa, service revenue declined by 0.4% to R48.23 million.

Analysts and investors have voiced concern over Vodacom’s ability to continue to grow as strongly as it has in the past in SA, amid increased competition and increasing saturation.

Analysts have also been critical over Vodacom’s limited footprint, especially when compared to rival MTN.

Aside from its headquarters in South Africa, Vodacom has additional networks in Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho – but it is dwarfed by rival MTN Group, which has operations in 21 countries in Africa and the Middle East.

However, Vodacom CEO, Shameel Joosub said that, while the company isn’t desperate for acquisitions, the group was eyeing a few prospects in Africa with a population exceeding 10 million, with no major operators present, a high GDP, and a low mobile penetration rate.

By the close of play on the JSE, Vodacom shares were trading at R103.14, giving the operator a market cap of R152.08 billion and a P/E ratio of 11.71.

More SA tech companies

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EOH interim earnings boosted by aquistions

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SA tech stocks: 6 months in