ALTRON REPORTS SOLID INTERIM RESULTS BASED ON GOOD PERFORMANCE BY GROUP COMPANIES
The Altron group’s results for the six months ended 31 August 2005 have shown good growth with a 16% increase in headline earnings per share, 17% increase in revenue, from R6 billion for the prior period to R7 billion, and a 14% increase in operating income from R442 million to R502 million. In accordance with JSE Limited requirements, the results for the prior year’s half year and full year results were restated to comply with IFRS. The Chief Executive of Altron, Robert Venter, said: “Positive business confidence and sound economic conditions have created healthy trading conditions for the group. Increased consumer spending stimulated growth within the Altech operations and higher public sector spending as well as an active building and construction industry, drove demand for Powertech products and services. The successful integration of CS Holdings and Digital Health Care Solutions at BTG, as well as a recovering ICT market, also contributed to growth.”
Commenting on the performance of its sub-holding companies, Venter said that Altech delivered a sound set of results, reporting improved headline earnings per share of 15.3% to 181 cents per share. This was driven by better than expected performances from most of its operating companies including Autopage Cellular, Netstar, Altech Card Solutions and Isis. On 10 October 2005, Autopage Cellular and Vodacom signed a 5-year renewal of their service provider and incentive agreement with an option to renew for a further five years. Agreements with Cell C are already in place and discussions with MTN in this regard are at an advanced stage. “The signing of this far reaching agreement with Vodacom provides the foundation for future growth at Autopage Cellular for the medium to long term”, said Venter.
He pointed out that Altech recently disposed of its 50% plus 1 share in Econet Wireless Global Limited (EWG) for US$87.5 million plus interest, which reflects a R155 million profit on investment. These funds were received in September and are not included in reported group cash balances.
Venter said that BTG performed above expectations with revenues increasing 23% to R1.7 billion and operating income by 35% from R95 million to R128 million, reflecting, for the first time, the inclusion of the businesses acquired from CS Holdings and the consolidation of 100% of Digital Healthcare Solutions.
“We are also satisfied with the performance by the 100%-owned Powertech group. Revenue increased by 22% to R2.1 billion despite the continuing strong rand, depressed conditions in the telecoms cabling industry and increased competition from foreign imports. Operating income was up by 28% to R131 million from R102.7 million on the back of strong results produced by ABB Powertech Transformers, Aberdare Power Cables, the Battery Group and the Industrial Group,” said Venter. Venter further commented that the return to profitability of Aberdare Cable’s offshore operations and the improved performance from the power cables division had a positive impact on the performance.
He added, however, that the downturn in the telecoms sector resulted in Aberdare Cables mothballing its copper and fibre telecom cables manufacturing plant in Port Elizabeth during September.
Referring to the various sectors in which the group operates, Venter said that Altech is well positioned to benefit from the increasing liberalisation in the telecoms market, the introduction of the Second Network Operator and the finalisation of the Convergence Bill.
“Powertech operations are expected to benefit from increased public and private sector capital expenditure in infrastructure projects such as the announced capex plans of Eskom and Transnet, World Cup 2010 and the Gautrain project,” he said. According to Venter the ongoing conversion of the financial sector to the Europay Mastercard Visa (“EMV”) standard has seen some delays but continues to benefit Altech and BTG. “In the light of the positive outlook for the sectors in which the group operates, Altron is well positioned to achieve acceptable growth in headline earnings and dividends for the full year,” Venter said.The Chairman of Altron, Dr Bill Venter, has announced the following board changes which will become effective from 12 October 2005: The appointment of Mark Lamberti, the Deputy Chairman and Chief Executive Officer of Massmart Holdings Limited, to the board of Altron as an independent non-executive director and the resignation of Buddy Hawton as an independent non-executive director of Altron. Norbert Claussen, the Chief Executive Officer of Power Technologies (Pty) Limited, has been appointed to the board as an executive director. As was announced on 21 July 2005, former executive director Adv Dali Mpofu, remains on the board as a non-executive director following his appointment as Chief Executive Officer of the SABC.