JSE-listed software and computer services company Altron on Monday reported a significant improvement in its half-year results to 31 August 2022, compared with the previous comparable period. This, despite facing major headwinds as a result of the ongoing conflict in Ukraine, persistent power cuts at home, as well as prolonged macroeconomic effects of the Covid-19 pandemic.
The group reported a 242% increase in headline earnings per share (Heps) to 41 cents, from 12 cents in August 2021.
Earnings per share increased by 270% from 10 cents to 37 cents, while group revenue grew 21% to R4.6 billion (2021: R3.8 billion).
Altron’s operating profit before capital items came in at R296 million, an improvement of 61% from R184 million, while net profit after tax increased 243% to R144 million (R42 million).
The group further declared a gross interim cash dividend of 16 cents per share, calculated on the current continuing operations’ Heps for the six months ended 31 August 2022.
Commenting on his first set of results as Altron’s newly-appointed CEO Werner Kapp stated that the group’s balance sheet remains healthy, despite experiencing challenges during the period.
“We are not immune to the climate of uncertainty, global supply chain constraints and inflationary pressures that all of us are subjected to daily.”
“The continued global supply chain shortages, which result in longer lead times, inflated prices and a shortage in electronic components impact revenue pressure in our Digital Transformation segment, resulting in margin squeeze due to increased prices,” he said.
After initially rising, the group’s share price traded in the red on Monday, with the stock decreasing by 2.13% to R7.82 by lunch time.
The group reported revenue improvements across its various segments which fall under its continuing operations, with the largest increases being recorded in the Other and Digital Transformation segments.
The Digital Transformation segment – which includes the contributions of the Lawtrust business, which was acquired by the group in October 2021, as well as the Altron Systems Integration (ASI) business – saw revenue increasing by 25.7% to R1.37 billion.
Altron Arrow, which is included in the group’s other segment, saw a 26.4% revenue improvement to R321 million, which the group says was led by higher component sales created by global shortages and the Enterprise Computing Solutions (ECS) software business.
The Own Platforms segment – which includes the group’s FinTech, HealthTech and vehicle tracking business Netstar – reported a 16% improvement in revenue to R1.63 billion.
Altron’s Managed Services segment reported a 16.6% increase in revenue to R1.36 billion, compared with the prior year, generating an operating profit of R21 million for the group, up from R9 million.
Looking forward to the rest of the year, the group said it expects ongoing challenges facing the industry – such as the global components shortage, national blackouts, inflationary and currency pressures – to continue to affect its Own Platform and Digital Transformation segments.
Kapp says his focus for the second half will be on limiting the impact of these short-term headwinds on impacted businesses.
“We have some exceptional assets across our business segments that are market leaders in high-growth areas. Our performance in the first six months, despite tough trading conditions, is a testament to that.
“Altron is an iconic South African company with great assets that can enhance the Digital Transformation journey of our customers and touch the lives of many South Africans,” he adds.