Altron has almost doubled its market value in 2024, the share having risen more than 80% since the start of the year, pointing to optimism about the company’s prospects.
Investors are bullish about the strategy and management, which have both helped to steady sentiment after a period of uncertainty after the unbundling of the group’s former cash cow Bytes Technology.
Year to date the stock has risen 85.02%, now trading at R18.15, helping to claw back its position after the Bytes unbundling. Just before it let the UK unit go, Altron’s share price had peaked at R34.60.
This is not to say the unbundling was a bad move. On the contrary, the transaction — which saw Bytes list in London, with a secondary listing on the JSE — created R13bn in value for Altron shareholders at the time. The uncertainty was about what the group would look like without the UK business.
For now, it appears that CEO Werner Kapp and his team have found a strategy and execution that have won them favour from market players.
Over the past 12 months, the share is up 126.03%, giving the group a R7.41bn market cap.
The former Venter family business is barely recognisable from just five years ago, having staked its future on a relationship with software giant Microsoft, the growth of cloud services, partnerships in the automotive sector, selling off noncore units and working to revive some of its legacy businesses.
One of these legacy businesses is vehicle tracker Netstar. The unit, a once-dominant player in its sector, had lost ground to competitors such as Mix Telematics, which recently merged with US based Powerfleet, and Karooooo-owned Cartrack.
But the Altron business is gaining on industry leader Cartrack, recently reporting revenue growth of 12% to R2.1bn, supported by a 27% rise in subscribers to more than 1.7-million for the year to February.
Charl de Villiers, head of equities at Ashburton Investments, is bullish about Altron, telling the Business Day Spotlight podcast: “Altron is the one company that has been around. It went through a period where it unbundled Bytes in the UK, which was enormously successful and unlocked a huge amount of value for shareholders.
“Post the bundling of Bytes, and when we took over at Ashburton, the Altron share price was languishing below R10, which we thought was underestimating the growth potential in that business, and the valuation opportunity in NetStar.
“Over the last year or two with a new CEO at their helm ... he’s done great work in just cleaning up that whole business and we’ve seen NetStar’s trajectory start to improve materially, so that’s helped the rating come back into that business and that’s done very well for the portfolio and for investors.”
In addition to Netstar, Altron continues to breathe new life into businesses that were once on the chopping block. It had been shaving off businesses that it deemed noncore.
Mid-2023 saw it conclude the sale of its ATM hardware and support business unit to NCR Corporation for $10m (R186.6m at the time).
In October 2021, the group sold its training services unit, Altron People Solutions, for an undisclosed amount. Altron Arrow, which distributes electronic components, was on the chopping block but was reclassified as a continuing operation more than a year ago. With this restructuring appearing to be done, the group has shifted its focus to bolstering its remaining units.
On Monday, Altron’s share price continued its upward momentum, closing 1.55% up.
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