Altron’s earnings from continuing operations to rise up to 24%

Altron expects to report a rise in full-year headline earnings from continuing operations, which have had a strong year-to-date performance. 

Altron, valued at R3.99bn on the JSE, has slimmed down its operations over the years, selling units it no longer considered core.

Headline earnings per share (HEPS) from continuing operations, which strip out the effects of one-off financial events, for the year to end-February is estimated to be 99c-105c, an increase of 16%-24% compared with the prior comparative period. 

Continuing operations exclude Altron Documents Solutions, Altron Nexus and the Rest of Africa business.

The group said normalising for the sale by Altron Managed Solutions of its ATM Hardware and Support Business on July 1 2023, the continuing operations are delivering year-to-date revenue growth, with double-digit growth in ebitda and operating profit.

The group’s results for the six months ended August were negatively affected by provisions and impairments totalling R462m. These noncash adjustments were raised within two discontinued operations — Altron Nexus (R334m) and Altron Document Solutions (R95m). This included an impairment raised at group level of R33m, related to goodwill held for Nexus on its balance sheet.

The group said these noncash adjustments negatively affected its full-year results.

The group headline loss per share is estimated to be 16c-21c, compared with HEPS of 29c reported previously. 

The technology firm put the Nexus unit up for sale in July 2023 after it lost the lucrative Gauteng Broadband Network contract to MTN. Having implemented the first two phases of the project, there was an expectation it would be awarded the third phase, but this did not happen.

Altron Nexus was first awarded a R1.2bn contract in 2014 to build a 1,600km high-speed fibreoptic network in Gauteng as part of the national government’s broadband target to achieve full connectivity in the province by 2030. 

In early 2022, the group sold its Document Solutions unit for R715m. However, the deal fell through earlier in 2024. Even then, Altron said “active disposal processes are under way. During the disposal processes, both businesses will continue to be managed for value.”

Altron said it had made progress on its strategic priorities and would maintain focus on growing revenue and driving operating leverage to increase profitability.

“The group remains highly cash generative and continues to degear. This supports its already strong balance sheet position and provides a solid platform to execute its immediate strategic initiatives and deliver long-term value to shareholders,” the company said. 

Altron’s shares closed down 0.92% at R9.71 on Monday. 

gavazam@businesslive.co.za