Listed electronics group, Altron, is selling its Altech Node video-on-demand product after poor uptake from retail customers.
The group issued a trading statement late on Wednesday (22 July) advising shareholders that it expects basic earnings to be 160% lower for the financial half year.
Basic earnings per share are expected to be a loss of at least 35 cents, versus the profit of 58 cents from the previous corresponding period.
Headline earnings are expected to be more than 150% lower (a loss of 36 cents versus a profit of 72 cents).
The group said that its financial performance has been negatively impacted by difficult trading conditions and reduced demand for its services.
Notably, the company said that uptake of its Altech Node by retail customers has been poor, and it is in discussions with “a third party” to acquire that particular business.
“It is anticipated that Altech Node will be disposed of in the short-term,” Altron said.
In May 2015, Altron announced its annual results for the year ended 28 February 2015, in which it reported an annual loss of R60 million.
This included an operating loss from continued operations of R26 million, and a loss from discontinued operations of R34 million, Altron reported.
Even back then, the writing was on the wall for the Node, with Altron reporting that sales for the product fell well below expectations.
“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,” it said at the time.
The group’s other segments, including Altech Autopage – which is in the process of offloading its GSM subscriber base – Altech UEC and Powertech Transformers, well all suffering strained performance.
Altron’s interim financial results for the half-year ending 31 August 2015 are expected to be announced on or about 7 October 2015.