Allied Electronics Corporation Limited (Altron) today announced that, for the year ending 28 February 2011, revenue was up 2% to R22,8-billion; earnings before interest, tax, depreciation and amortisation (EBITDA) increased 6% to R2,1-billion and headline earnings per share increased 15% to 228 cents per share.
The group declared a 108 cents per share dividend to its shareholders, 20% higher than for the year ended February 2010.
“Overall, we are pleased with the performance and resilience of the group. We have shown double digit growth even though trading conditions were challenging in a number of our key markets,” says Altron chief executive, Robert Venter.
Altech remains Altron’s biggest contributor towards group revenue and EBITDA, but there has been a marked increase in the contribution from the other two wholly owned subsidiaries, Powertech and Bytes. Profitability at both Bytes and Powertech increased significantly while Altech’s profitability reduced in the year under review after a strong, sustained growth performance throughout the toughest part of the global recession.
Altech increased revenue by 5% to R9,7-billion but EBITDA decreased 8% to R1,1-billion reflecting an EBITDA margin of 11,1%.
The company experienced difficult trading conditions particularly in East Africa where new entrants into the telecommunications market and additional broadband capacity from submarine cables forced prices down. Delays in completing local networks in the region also had an impact on profitability. The remaining businesses in the Altech group performed according to expectation with steady performances from Altech Autopage Cellular and Arrow Altech Distribution coupled with excellent results from Altech Netstar and Altech Card Solutions.
Powertech’s revenue decreased by 2% to R7,1-billion but cost cutting and rationalisation of certain operations resulted in EBITDA increasing by 27% to R539m reflecting an EBITDA margin of 7,6%. The transformer business performed exceptionally well on the back of increased demand from municipalities and Eskom. Powertech Cables’ revenue increased largely as a result of the higher copper price, and Powertech Batteries performed well in the automotive and mining sectors. The systems integrator businesses delivered very pleasing results after various new contract wins.
Increased volumes saw Bytes increase revenue by 2% to R6,1-billion and EBITDA by 21% to R474-million reflecting an EBITDA margin of 7,8%. Previously loss-making businesses were turned around while cost cutting initiatives and market share gains resulted in improved profits across the board. Record years were recorded by Bytes Systems Integration, Bytes Software Solutions (UK), Bytes Managed Solutions and Bytes Healthcare Solutions.
“In terms of transformation, we are very pleased to have essentially met our B-BBEE Vision 2012 targets a year in advance. The Bytes group reached a Level 2 contributor status on the DTI scorecard, with the Altech group at Level 3 and Powertech also reaching a Level 3 contributor status. We are proud of Altron’s achievement on being rated the 25th most empowered company in South Africa based on the FM/Empowerdex survey for 2011,” says Venter.
In the last 12 months Altech closed various empowerment transactions with Altech Netstar, Altech Radio and Altech UEC all selling 25% of their equity to empowerment partners.
Venter says that the board believes that the prospects for the year ahead are positive. “The group, having implemented various initiatives, has stripped costs to a minimum. This puts us in a good position to take advantage of a further upswing in the economy.”
The board believes that a turnaround in Altech’s East African businesses is imminent with various strategies now in place to correct previous issues. Bytes is expected to continue to perform well, with market conditions likely to strengthen further. Powertech’s cost efficiency initiatives will continue in the year ahead, but a recovery of the building and construction sector is necessary in order for the cable business to return to acceptable levels.