Technology group Altron says it expects a “solid” performance in the second half of its financial year despite expectation that load-shedding and supply chain issues will continue to weigh on its operations.
This comes as the group more than doubled its interim dividend due to a solid performance in its latest interim results released on Monday.
The company, valued at R3.28bn on the JSE, upped its dividend from 7c to 16c in its results to end-August.
The Netstar owner’s net profit after tax for continuing operations more than tripled to R144m and more than quintupled to R96m for total operations.
Revenue from continuing operations increased one-fifth to R4.6bn and 15.2% to R5.3bn for the total group.
The number of Netstar subscribers rose more than one-fifth (22.4%) to 1.24-million. More than four-fifths of these are in SA, just more than one-tenth in Malaysia, 5.2% in Australia and the rest from elsewhere.
Altron announced the appointed of Grant Fraser, a former COO of MiX Telematics, as MD for Netstar with effect from January 2023. Netstar competes with companies such as Mix Telematics and Cartrack (owned by Karooooo).
The revenue of the fintech side of the business rose more than a third to R542m and operating profit almost three-quarters to R132m as it reflected enhanced margins.
Despite selling its Document Solutions businesses in March, operating profit was still R10m ahead of the prior year’s performance.
The market was all over the place after the results with Altron’s share initially shooting up almost 5% in morning trade, before reversing course to trade 9% weaker in the afternoon. It ended the day down 2.38% to R7.80.
The company continues to face macroeconomic and industry challenges such as load-shedding, electronic component shortages inflating prices, global supply chain niggles delaying the delivery of hardware sales, interest rate hikes, and high inflation pushing up logistics costs.
“We are not immune to the climate of uncertainty, global supply chain constraints and inflationary pressures that all of us are subjected to daily. The continued global supply chain shortages, which result in longer lead times, inflated prices and a shortage in electronic components impact revenue pressure in our digital transformation segment, resulting in margin squeeze due to increased prices,” said new CEO Werner Kapp.
Despite the effect of these challenges, the company expects “a solid second-half performance with the majority of our businesses largely continuing to trend positively, with the group’s robust balance sheet expected to be further strengthened”.
The former Venter family business is barely recognisable, having staked its future on a relationship with software giant Microsoft, the growth of cloud services and partnerships in the automotive sector.
The group is pursuing a strategy that involves focusing on growth areas such as cloud, data analytics, the internet of things and security.
After separately listing its biggest money-spinner, Bytes Technology in 2020, Altron’s business in the rest of Africa had been billed as a focus area for growth, but that tune has since changed given the reliance of these operations on hardware.
In September, the company hired industry veteran Kapp as its new CEO, replacing Mteto Nyati, who left in June after a successful five-year tenure. Kapp spent 22 years at Dimension Data where he held various roles, including CEO of Middle East and Africa, and COO and programme manager for the region.
Update: October 24 2022
This story has been updated with new information.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.