Altron CEO Mteto Nyati. Picture: SOWETAN
Altron CEO Mteto Nyati. Picture: SOWETAN

JSE-listed technology firm Altron, whose share price has risen four-fold over the past four years, said on Thursday that it is confident it will meet its target of doubling earnings by 2021.

The group, headed by former MTN CEO Mteto Nyati, grew its earnings before interest, taxation, depreciation and amortisation (ebitda) 19% to R803m in its six months to end-August, though this was partially due to accounting changes. Without accounting changes, which brings leases on to the balance sheet, ebitda rose 9%.

The company has set a target of doubling its ebitda by 2021, having pursued a turnaround strategy since 2017 that has seen it slash head-office costs and rationalise its business, formerly a family-run affair.

“We accelerated the execution of our ‘one Altron strategy’, which focuses on doing more with existing customers, while continuing to win new ones,” said Nyati in a statement. “This has delivered organic growth for our business.”

Growth in Altron Bytes UK continues to exceed expectations, the company said, with revenue growing 13% and ebitda 46% to R303m.

Altron declared an interim dividend of 29c a share, up marginally from the prior period’s 28c.

“Our focus will remain on organic growth, supplemented by acquiring select small- to medium-sized businesses in our focus areas, which will lead to enhanced capabilities and an expanded geographic footprint,” Nyati said.

Nyati said the group’s 20,000 customers in SA and 7,000 in the UK were an asset that the company could leverage.

Altron’s CFO Cedric Miller said the cash generated by their business in the half-year had been eaten up by greater working capital requirements in their businesses, affected by factors such as Altron Nexus’s contract fulfilment costs and the recently concluded deal to fit special in-car internet devices in new Toyota vehicles.

Miller said subsidiary Netstar would have to invest to supply the components for these units, which would be another strain on their working capital.

Altron’s share price had slipped 1.36% to R26.89 as of 9.12am on Thursday, but remains up 49.39% so far in 2019.

Since the beginning of 2016, the company’s share price has risen 380%.

Correction: October 24 2019
An earlier version of this article mistakenly referred to Altron pursuing double-digit revenue growth, when it, in fact, seeks to double ebitda by 2021.