Altron still eager to sell legacy assets
Altron’s interim results failed to impress the market on Thursday. Some believe that all the "low-hanging fruit" of new CEO Mteto Nyati’s tenure has been plucked.
The company, which owns Bytes and vehicle tracking business Netstar, has been repositioning itself to focus on information and communication technology (ICT) but still needs to sell legacy assets that were acquired under the former reign of the Venter family.
The biggest businesses still to be sold are Powertech Transformers and Altech UEC. The former made a R51m earnings before interest, tax, depreciation and amortisation (ebitda) loss for the first half to end-August, while Altech UEC grew profit to R47m from R17m.
Cratos Wealth portfolio manager Ron Klipin described Powertech as "the elephant in the room" and said "obviously they’ve not able to get the price" they wanted.
Nyati, who took the helm in April, said that Powertech Transformers and Altech UEC "are my priorities … we’d like to make sure we have closed [the sale] of those by the end of the financial year". But he was cagey on whether firm buyers have been lined up as yet.
The sale of the divisions is also key to Altron’s debt reduction drive. Borrowings stood at R1.1bn at the end of the first half, in which revenue for continuing operations grew 5% to R6.8bn and headline earnings per share were 16% higher at 57c.
Altron’s Bytes business, which is central to its ICT plan, had a cracker first half in the UK, growing revenue by 25% and ebitda by 21%. Overall, its ICT business posted a 12% rise in ebitda to R376m.
Altron shares closed 3.5% down, but year to date they are still 37% higher.