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Cables group makes good recovery
JSE listed
Allied Electronics Corporation Limited (Altron)
has published its annual results
for the year ended 28 February 2015. Revenue decreased by 1 % to R 27,6 billion and
earnings before interest, tax, depreciation and amortisation (EBITDA) by 23 % to R1,4
billion. Headline earnings per share (HEPS) declined by 50 % to 94 cents.
“We have a mix of macro-economic and operational issues that impacted our results
this year,” said Altron chief executive, Robert Venter.
Profitability in the Altron Power division was adversely affected by a marked decline
in orders from Eskom and strike action impacted the manufacturing businesses.
In Altron Power, the Cables group made a good recovery after gaining traction in new
markets but this was unfortunately countered by a significant decline in theTransformers
group which experienced some operational issues, very low demand for its large power
transformers and incurred once-off costs to close its Booysens plant in Johannesburg.
Powertech Batteries performed satisfactorily given margins were under pressure due to
an increasing lead price as well as on-going competition from imports while the System
Integrators business struggled with delays in the start of various previously awarded
projects coupled with weak order inflow. However, Powertech Quadpro, the turn-key
substation business, made good inroads into Africa and in particular Zambia.
“In AltronTMT, Altech Autopage experienced a tough market and ongoing mobile ter-
mination rate reductions which compelled us to make the decision in principal to dispose
of the GSM subscriber base,” said Venter. “Discussions are at an advanced stage to sell
these subscribers and the non-GSM part of the business will be retained and housed
within other operations.”
Other businesses within the telecommunications division of AltronTMT i.e. Altech Net-
star have performed well and have developed exciting new telematics and fleet products,
Bytes Systems Integration expanded its biometrics offering, and Altech Radio Holding
performed well off the back of the Gauteng Broadband Network contract.
“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.
AltronTMT is well advanced in exploring alternative opportunities and routes to market
for this product,” said Venter. Besides the effect of the NUMSA strike, the multi-media
businesses in AltronTMT were also affected by lower international orders as a result of
a delay in African DigitalTerrestrialTelevision Migration (DTT).
The business’ order book however strengthened significantly after year-end and the
South African DTT rollout made progress. The group’s IT assets (which consist mainly
of the previous Bytes businesses) continued to perform well, exceeding expectations.
In particular Bytes UK, a Microsoft
licensing and online security busi-
ness, Bytes Universal Systems,
a software business, and Bytes
SecureTransaction Solutions stood
out. The Xerox business in Bytes
Document Solutions made a good
recovery and Bytes Managed Solu-
tions produced solid results despite
some foreign exchange losses.
Going forwardVenter admitted that
tough decisions need to be made to
improveAltron’s performance, “We
need to focus and streamline our
group which will mean selling off
some non-core assets and adapting
our offering to our customers. We
are certain that these steps, which
will be taken in the near future, will
benefit our stakeholders.”
Enquiries: Robert Venter.
Tel. 011 645 3663
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