Mteto Nyati.   Picture: SOWETAN
Mteto Nyati. Picture: SOWETAN

Allied Electronics (Altron) has entered a new era — one in which it has pinned its hopes on changes that might renew investor interest in the 51-year-old company.

After only three weeks at the helm, CEO Mteto Nyati has introduced a raft of changes, charting a new direction for the electronics, technology and telecoms conglomerate.

Nyati, who replaced scion Robbie Venter, has announced changes to the executive committee to create a "leaner group structure that is aligned" with its ICT ambitions. He has added executives leading human capital, shared services, marketing and the Altech Netstar operation to the executive committee. The group executives for corporate finance, strategy & technology and corporate affairs, and the operations executive for telecoms, multimedia & electronics and technology have been removed from the committee.

"Our priorities as a group are to aggressively drive cost efficiencies; recruit, develop and retain top talent; build a trusted ICT brand; and accelerate growth," says Nyati. "The new structure reflects these priorities while setting the tone across the group on cost focus."

The appointment of Nyati was largely welcomed by the industry, with punters saying the former MTN SA CEO would bring new ideas to the group.

Altron was founded by Bill Venter who, with his sons, successfully built the business into one of the biggest electronics groups in the country. In its heyday, Altron had more than 40 companies under its operations, spanning Europe and Africa.

Last year, the family ceded control and operational management of the group. This followed a series of huge losses as a result of a failed venture into East Africa, and poor performance from some of its manufacturing and telecoms businesses.

The group also sold noncore and nonperforming assets to focus on the technology and selected telecoms businesses.

Kaplan Equity Analysts MD Irnest Kaplan says there could be renewed investor appetite for Altron.

"There is still a lot of hope," says Kaplan.

Altron will have to report good sets of results for at least two periods before investors and the market can regain interest in the company, he says.

The company is focusing on the Bytes group of companies, which provides a range of software and hardware products to corporates, and a few telecoms businesses, including car tracking business Altech Netstar.

Kaplan says these businesses offer services that are in demand. "IT services will always be in demand. The only problem is if the economy doesn’t do well for the next two to three years, then corporates could cut down spend."

Cratos Capital portfolio manager Ron Klipin says though the share price has shown some positive movements in recent weeks, there is still a lot of work ahead for new management and shareholders.

"We are waiting for the next set of results and any additional news on the restructuring. In addition, we need to see whether the new management is able to deliver," he says.

Altron has already showed a slight improvement in its 2017 half-year financial results on the back of restructuring some of its operations and improved performance from core technology businesses.

Klipin says he hopes Altron’s full-year performance will be "fairly clean", as there should not be any large-scale recurring
charges or impairments, "as these have already been absorbed in previous accounting periods.

"This will give a better idea of the sustainability of the business."

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