Antenna specialist Alaris enjoys profit surge from new contracts
Antenna manufacturer says large orders resulted in high volumes and high margins
Half-year profits for AltX-listed antenna specialist Alaris Holdings jumped fourfold, helped by large orders secured the previous financial year, the company said on Tuesday.
The group said some of the orders were repeat contracts.
Profit almost quadrupled to R23.1m, with Centurion-based Alaris Antennas completing three major orders, boosting volumes and profit margins, the group said.
Basic earnings per share jumped fourfold to 19.26c.
Alaris Holdings designs, develops, manufactures and sells specialised broadband antennas and other radio frequency products.
Irnest Kaplan of Kaplan Equity Analysts said Alaris showed a good performance for the period, noting that the company’s revenues tend to be uneven through the year like other businesses.
“One or many contracts here, a quiet period there, and long lead times to get some products into the hands of customers. This makes comparing half-year results difficult,” he said, adding that Alaris’s performance often had to be analysed from year to year, or over a number of years.
Alaris manufactures much of its products and equipment in SA, with about 90% being sold to foreign markets in places like Europe and the US.
SA’s 21-day shutdown, which starts on Friday, and similar action in other parts of the world, is likely to result in a slowdown in the firm’s business, said Kaplan.
Alaris CEO Juergen Dresel said that while the group was monitoring the effects of the coronavirus, the company had a diversified supply chain and sufficient working capital for the medium term.
He said the group has been focusing on establishing and growing its physical presence in the US, the UK and Finland. Unlike emerging markets, these countries tend to have system integrator businesses that can buy their products.
Alaris Holdings, which sells broadband antennas and allied products, also said Finland-based Cojot benefited from large sales orders secured at the end of the previous period.
Alaris, which has a market capitalisation of R251m, said late invoicing had further boosted its cash position, which stood at R85.1m at the end of the period, from R18.4m previously.
Despite the positive financial results, shares in Alaris were unchanged for most of Tuesday, closing 2% down at R1.96.
Kaplan said trading in Alaris shares was slow as small cap stocks had fallen out of favour with investors. Scandals and failings at other technology businesses such as EOH had added to the “jitteriness”, he said.
With Karl Gernetzky