The power crisis and weakening rand have proved brought both good and bad news to Allied Electronics (Altron), which today turned in excellent results for the year ended 29 February.
The impact of local power outages and political changes combined with the global financial market turmoil impacted negatively on general market sentiment, the group says in a statement.
"At the same time, demand for infrastructure development is continuing at the expected pace in both the public and private sectors despite an increasing domestic interest rate environment and worldwide pressures on economic growth.
"Government`s focus on infrastructure spend to create GDP growth and job creation, as well as to deliver on election commitments, creates an environment conducive to strong demand for our group products."
Infrastructure spending from state-owned enterprises and local authorities has increased, largely as a result of the power crisis.
"The Powertech businesses showed significant growth on the back of increased spending by Eskom and the municipalities as the need for stabilising electricity supply intensified."
The weakening rand has improved earnings from foreign operations for some companies while leading to increased costs and reduced margins for others.
The group's revenue increased by 25% to a record R21,4-billion and operating profit increased by 27% to R1,9-billion. Headline earnings per share grew by 33% over an already-high base.
All three of the operating companies – Altech, Bytes and Powertech – recorded strong growth with headline earnings per share increasing by 23% at Altech while Bytes and Powertech increased headline earnings by 23% and 39% respectively. Dividends for the group increased by 32% to 156 cents per share.
The group is confident that movement in the telecommunications market offers opportunities for its products and services.
Within the ICT market, there has been an increase in local spend, along with an increased demand for Bytes products.