Altron expects to report higher earnings at the halfway stage of the year as the positive momentum it experienced in the second half of the 2024 financial year continued into the current reporting period.
The group said in a statement on Wednesday that headline earnings per share (HEPS) for the six months ending August 31 would be at least 20% higher than a year ago.
The group reported at the February 2024 year-end results that the successful implementation of the profit improvement strategies and target operating models in Altron’s continuing operations and Altron Document Solutions resulted in an improved performance in the second half of the 2024 financial year.
“This positive momentum has continued into the 2025 financial year, leading to a stronger year-to-date performance in comparison to the comparative period, which was negatively affected by provisions and impairments raised,” it said.
The own platforms segment has delivered a strong year-to-date performance with Altron FinTech, Altron HealthTech and Netstar growing revenue, together with notable growth in Ebitda and operating profit, it said.
Within the IT services segment, Altron Digital Business has delivered year-to-date revenue growth in line with the market, as the company starts to see the early benefits of the new sales operating model taking effect. However, Ebitda and operating profit are anticipated to be softer, due to nonrecurring project expenses relating to historic contracts which have now been closed and some project delays.
Altron Security’s performance benefited from the corrective action taken in the second half of the 2024 financial year, with the expectation of modest growth in Ebitda and operating profit.
Altron Arrow is targeting to maintain its operating profit margin for financial year 2025; however, revenue is anticipated to be softer due to the cyclical global slowdown in electrical component distribution.
In the comparative period, Altron Document Solutions and Altron Nexus were restructured and the management teams strengthened. Profit improvement strategies were implemented to improve cash flow generation and return these businesses to profitability.
Active disposal processes were run for both businesses. A strategic evaluation of all options for Altron Document Solutions was conducted, including an assessment of the offers received. These offers were below the board’s assessment of fundamental value and carried execution risk and as a result, it concluded that retaining the unit within the group was the most effective option to maximise value for shareholders.
Consequently, Altron Document Solutions will no longer be classified as held for sale and will be included in continuing operations within the IT services segment in the reporting period.
“Despite historically being held-for-sale, Altron Document Solutions remains an attractive business. It is supported by a robust customer base and long-term contracts that generate sizeable annuity revenue, with strong support from its partner Xerox,” Altron said.
The successful execution of Altron Document Solutions’ profit improvement strategy has continued, resulting in year-to-date growth in revenue, Ebitda and operating profit, Altron said.
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.