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Altron TMT plans for growth

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Joint ventures, key acquisitions, disposals, international expansion and cost savings are key focus areas for Altron TMT’s growth strategy.
This is according to Craig Venter, group executive of Altron TMT and CEO of Altech, following Altron’s release of its financial results for the year ended 28 February 2015, to which Altron TMT was the key contributor, generating R1,2-billion at an EBITDA level.

“The end of February 2015 marked the completion of the first full financial year for Altron TMT as a unit,” he says. “Aligning Altech and Bytes more closely within Altron TMT presented various opportunities for the businesses to work effectively together and created a formidable organisation, with tremendous power and potential in the Telecommunications, Multi-media and Information Technology environments.

“Furthermore, the financial year yielded excellent savings of R145-million through business unit optimisation and increased shared services savings. Added to this is the R40-million in cost savings that are being achieved at Altron TMT head office in terms of a reduction in travel and other expenses, which effectively only started in November 2014.”

The past 12 months has also seen the streamlining of Altron TMT’s asset portfolio and the divestiture of non-core, less relevant businesses. Two such initiatives were the sale of LaserCom to Tunleys, one of Bytes Document Solutions’ long-standing customers and a key player in the mail and print communication industry, and the sale of the Bytes UK Document Solutions business.

Another disposal was that of the 850 ATMs owned by Bytes Managed Solutions to Absa. The approach by Absa to purchase their branded ATMs and related franchise agreements fitted in well with the Altron TMT strategy of streamlining the business by focusing on core competencies and converged solutions.

With respect to acquisitions, Bytes People Solutions acquired Inter-Active Technologies, one of South Africa’s most prominent contact centre businesses. The acquisition is of strategic importance in that it cements Bytes People Solutions as one of the country’s premier service providers in business process outsourcing, a key growth area in the South African market.

Additionally, in August 2014, Altech Netstar acquired the business of FleetPro, a leading fleet and asset management solutions provider which has allowed Altech Netstar to offer its customers a fully comprehensive range of market leading fleet solutions. A strategic imperative for Altech Netstar is to deliver the most all-encompassing range of fleet solutions in the market, and the acquisition of FleetPro provides it with a unique offering while enhancing its position as a technology leader in fleet management.

The healthcare industry, in which MediSwitch and Med-e-Mass play a significant role, saw the acquisition of Health-Soft, a provider of innovative electronic solutions, such as e-scripting, designed to address the day-to-day needs of healthcare delivery. The acquisition of Health-Soft broadens the scope of services that Med-e-Mass currently offers.

“In terms of accessing new markets and international expansion we have seen a number of moves on this front,” says Venter.

A case in point is the purchase of Brand New Technologies (BN Tech) in 2013 which was integrated into Bytes Systems Integration. Since that time, the business has produced new voter registration technology, already utilised by the Tanzanian Government. The government requested a mobile voter registration system that captured the details of voters in remote areas and then produced a one-time voting key card for each eligible voter.

The card can only be used once, and then expires. There are no superfluous polling registration requirements, as the card will suffice on its own. The solution is solar powered should the batteries on the device run low. Approximately 22 000 of the devices were ordered and dispatched to Tanzania. There is now interest from other African countries with respect to the deployment of the mobile voter registration system.

Altech Netstar’s recent acquisition of Pinpoint Communications, an Australian business with over 15 years of experience in the development of software and hardware for the collection and distribution of mobile data, provides a foothold in the Australian market. Pinpoint Communications offers services such as vehicle telematics, asset, fleet and works management, driver and personnel identification, and certified telematics, demonstrating clear similarities with Altech Netstar’s own offerings.

Altech Netstar is also making a move into more African countries in response to the demand for innovative fleet and telematics technologies and solutions.

With respect to the roll-out of digital terrestrial television in South Africa, Altech UEC has been selected as one of the manufacturers/suppliers for the South African digital terrestrial television tender, with volume allocations expected soon.

Regarding Altron’s SENS announcement regarding Altech Autopage, Venter notes that the group is at an advanced stage of negotiations regarding the potential disposal of Altech Autopage’s GSM subscriber bases at an acceptable, market related valuation.

“While the decision to dispose of these subscriber bases has been based on, among others, the impact of the ongoing Mobile Termination Rate (MTR) reductions, and continued industry and consumer deflationary pressures, Altech Autopage has been a significant revenue generator to the Group since its inception and I am exceptionally proud of what the Altech Autopage team achieved in that time,” Venter says.

Commenting on Altech Node, the world’s first fully converged home gateway console, Venter says: “This world-class technology has seen interest from a number of players in the communications and multimedia arena and we are in the process of pursuing a strategic alliance in line with our original intent.”

Venter concludes that Altron TMT has a clear roadmap for the future. “I am confident that we are on the right track with regard to our growth strategy particularly with respect to accessing new markets and that we are fully geared to take advantage of opportunities as and when they arise. This year marked the 50th anniversary of the founding of Altron, an extraordinary achievement and a reflection of how the Altron Group and its businesses have not only weathered competitive, economic and political storms but have flourished through a strategic focus on growth and development opportunities.”