Shares in Altron shot up more than 7% in intraday trade on Monday as the technology group reported a rise in full-year headline earnings from continuing operations.
The group also reported increased cash generation and a strong balance sheet, which allowed it to increase its final dividend per share by 74%.
“Looking ahead, as we navigate through a challenging economic landscape exacerbated by political uncertainty, we remain committed to achieving our medium-term guidance,” CEO Werner Kapp said, as the group reported its results for the year to end-February.
By 2026, Altron is targeting operating profit margins of 19% and 7% for its platforms and IT services segments, respectively.
The group’s headline earnings per share (HEPS) from continuing operations, which strip out the effects of one-off financial events, rose 36% to 116c, it said in a statement on Monday.
Altron has slimmed down operations over the years, selling units it no longer considered core. Continuing operations exclude Altron Documents Solutions, Altron Nexus and the rest of Africa business.
Overall, the group’s headline loss per share was 25c, compared with HEPS of 29c reported previously, largely due to non-cash adjustments raised in the six months to end-August.
Continuing operations generated revenue of R8.3bn, down 2%, due to including only four months of the ATM business compared with a full year in 2023.
Despite a reduction in revenue, gross profit increased 11% with gross margin expanding five percentage points to 41%.
Earnings before interest, tax, depreciation and amortisation (ebitda) rose 20% to R1.5bn with operating profit increasing 23% to R739m. A final dividend of 33c per share was declared from 19c a year ago.
Market players initially cheered the earnings report but by the close the share price was up just 0.71% at R11.40, giving it a market cap of R4.69bn. It has rallied 50% over the past year and more than 11% so far this year.
Netstar grew revenue 12% to R2.1bn, supported by a 27% increase in subscribers to more than 1.7-million, with 2.3-million connected devices. “This growth reflects industry-leading rates and a notable market share gain, with enterprise customers increasing 33% and consumer customers increasing 14%,” it said.
Net subscriber additions improved 60% to about 370,000.
Altron FinTech grew revenue by 5% to R1.1bn, against a strong comparable base that benefited from abnormally large hardware sales in the 2023 financial year.
Altron HealthTech’s revenue increased 7% to R374m. The Digital Transformation segment, which houses Altron Systems Integration, Altron Karabina and Altron Security, generated revenue of R2.9bn.
The group has upgraded other profit targets as well.
“Additionally, we are targeting operating profit of R1.1bn from continued operations. Our strategic positioning within the platform and IT services sectors, supported by our proprietary IP [intellectual property] solutions, enables us to identify opportunities and solve real-world problems for our customers,” Kapp said.
“We remain dedicated to enhancing long-term shareholder value through the execution of our strategy, disciplined capital management, strategic investments and a strong focus on sustainable, profitable growth.”
Update: May 20 2024
This story has been updated with new information.
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