Netstar to set the pace — Altron
• Leadership remedies and aggressive approach in sales and marketing have led to market share being won back, says group CEO
Allied Electronics Corporation wants its Netstar unit to take pole position in SA’s fleet management and telematics industry, CEO Mteto Nyati says.
Allied Electronics Corporation (Altron) wants its Netstar unit to take pole position in SA’s fleet management and telematics industry, says CEO Mteto Nyati.
Netstar, which had underperformed for years and was probably “number two or three” in the market, was starting to recover and win back market share, Nyati said.
Altron wanted Netstar to become the market leader, the group CEO said. “We grew net connections 180% year on year [in the year to February] in a market that’s flat, which means we’re taking share.”
Netstar had been “nowhere” but was now benefiting from recent “fixes”.
“The issue had nothing to do with our capabilities; it had everything to do with how we represented ourselves. We’re not aggressive enough and we’re not engaging customers.
“So the changes I’ve made there, at leadership level and in sales and marketing, was to address this point,” Nyati said.
In the year to February, Altech Netstar’s revenue grew 13%, while earnings were increased 9%. The unit bought Australian business EZY2C for A$15.9m in July 2017.
Altron’s share price closed 2.4% up at R14.13 on Thursday after the group said revenue from continuing operations increased 14% to R14.7bn, while earnings climbed at a faster rate.
Revenue was driven by the Bytes UK business, Altron’s “healthtech, fintech and cyber security units”, and Netstar’s recovery, Nyati said.
Earnings before interest, taxes, depreciation and amortisation from continuing operations rose 19% to R1.1bn.
Nyati said Altron’s healthtech unit aimed to scale up substantially by penetrating the public sector. The unit provides software to mostly private-sector doctors, allowing them to manage patient data and connect with medical aid schemes and pharmacies.
It hires the software to doctors and charges fees on transactions. “We have about 10,000 general practitioners who run their businesses on our intellectual property.”
Nyati said the business could grow materially by entering the public healthcare sector, which is far larger than the private sector. “There’s a big requirement in the public healthcare system, so that’s where growth’s going to be.”
Altron planned to grow its rest-of-Africa business by offering more of its products to existing customers over the next 18 to 24 months, after which it would actively look for acquisitions, Nyati said.
“Our approach to the African market will be to ensure that our current customer base is exposed to our entire solutions offering while we explore acquisition opportunities which exist in our areas of focus,” he said.
The rest-of-Africa business, which has a new head in Ike Dube, contributes about R400m in annual revenues, or just under 3% of group turnover. Altron also aimed to grow its Microsoft practice, Nyati said.
“In areas where we have missing capabilities [to implement Microsoft projects], we’ll then go and do acquisitions. We have to have a strong Microsoft practice,” he said.
Altron was likely to dispose of Powertech Transformers by the end of May, while disposals of the remaining discontinued operations were likely to be completed by February 2019.