Altron’s platform segment boosts first-half profit

Technology firm Altron has reported a strong set of results at the halfway stage, increasing profit more than 100%, primarily driven by the performance of the platforms segment. CEO Werner Kapp says the group has found its footing post the unbundling of Bytes Technology Group. 

The transaction in December 2020 — which saw Bytes list in London, with a secondary listing on the JSE — created R13bn in value for Altron shareholders at the time. While seen as positive for investors, the move created uncertainty about what the group would look like without the UK cash cow. 

At an investor presentation on Monday, Kapp said he was happy with how the business was performing. 

“I did a little bit of homework. The last time we owned Bytes in 2020, [at the half year], we delivered revenues of about R8.5bn, profit of R450m and operating margin of 5%. In the results now past, with 60% of that revenue, we delivered R25m more profit and double the operating profit margin of 10%. I think this is a really pleasing result [showing] what we’re trying to do in the business,” he said. 

“And, of course, exceptionally pleasing to see how that is leading to increasing returns to our shareholders and to be in the fortunate cash position we are in.”

The group, now worth R7.69bn, reported profit after tax for continuing operations for the six months to end-August of R298m from R155m a year ago, while headline earnings per share (HEPS) of 79c were also up more than 100%.

An interim dividend of 40c per share was declared, up 60%.

Revenue for continuing operations was 2% lower at R4.9bn. The ATM business was sold in July 2023, with four months’ trading included in the comparative results, it said in a statement on Monday.

Continuing operations include Netstar, Altron FinTech, Altron HealthTech, Altron Digital Business, Altron Security, ADS and Altron Arrow and excludes Altron Nexus.

ADS was previously reported as part of discontinued operations. For the first half of the 2025 financial year, ADS is reported as a continuing operation. The first half of the 2024 period was restated for the classification of ADS as a continuing operation.

Excluding ADS and the ATM business, revenue grew 4%, earnings before interest, tax, depreciation and amortisation (ebitda) increased 23%, operating profit rose 29% and HEPS were up 50%, the group said.

“The leverage in our platform businesses led to excellent segmental performance as we continued to add scale. Our customer-centric focus and higher margin annuity revenue mix, are laying a strong foundation for future performance,” said Kapp.

Netstar continued its upward trajectory, growing connected devices 26% to 2.4-million and increasing subscribers by 21% to 1.9-million. This translated into a strong financial performance, with revenue growing 11%, ebitda improving 34% and operating profit increasing 45%.

Altron FinTech grew revenue 10%, ebitda by 54% and operating profit by 63%, driven by an increase in small and medium-sized enterprise customers and the value of debit orders processed in the collections and payments business.

ADS was reclassified as a continuing operation after a review of strategic options. ADS made a positive ebitda contribution of R30m, from an ebitda loss of R123m before.

The first half included R95m of provisions raised.

The group said R330m growth capital expenditure was invested, focused on Netstar and Altron FinTech, as well as systems and platforms.

The group said it remained on track to achieve its medium-term targets for operating margins in the platforms and IT services segments.

In lunchtime trade, the share was up 2.92% at R18.65, continuing Altron’s rally over the past year. In the year to date the stock is up 90%.

mackenziej@arena.africa
gavazam@businesslive.co.za