Trading update puts brakes on Altron rally
Altron’s interim trading statement has cut short the rally that made the former Venter business empire one of 2017’s better JSE performers.
On Wednesday, the share closed 3% down at R12.15, but still gained 40.4% year to date.
Altron’s normalised headline earnings per share for the six months ended-August are expected to be up by at least 10%, which takes into account "significant" one-off restructuring costs that Altron says will cut future overheads.
However, Nitrogen Fund Managers portfolio manager Rowan Williams, who bought the stock earlier in 2017, said he was "cautiously heartened" by the trading update and "assuming that the exclusions are legitimate, the profits from continuing operations look reasonably good to us".
That includes earnings from its offshore operations, in particular its Bytes UK technology business, which Altron said were "in line" with the corresponding period last year, notwithstanding the effect of the stronger rand.
If one strips out adjustments for one-offs and the closure of certain businesses, Altron’s headline earnings will, in fact, drop 13%-17% for continuing operations.