Contracts boost profit at Alaris

Half-year profit at AltX-listed antenna specialist Alaris Holdings jumped fourfold, helped by big orders secured the previous financial year, the company said on Tuesday. Some of the orders were repeat contracts.

Profit rose to R23.1m as Centurion-based Alaris Antennas executed three major orders, boosting volume and profit margins. Basic earnings per share leapt fourfold to 19.26c.

Alaris Holdings designs, develops, makes and sells specialised broadband antennas and other radio-frequency products.

Irnest Kaplan of Kaplan Equity Analysts said Alaris showed good performance for the period, noting that revenue tended to be lumpy and not spread evenly over the year.

“One or many contracts here, a quiet period there, and long lead times to get some products into the hands of customers. This makes comparing half-year results difficult,” he said.

Alaris manufactures much of its products and equipment in SA, with about 90% sold to foreign markets in places such as Europe and the US.

SA’s 21-day shutdown, which starts on Friday, and similar action elsewhere were likely to result in a slowdown in the firm’s business, said Kaplan.

Alaris CEO Juergen Dresel said that while the company was monitoring the effects of Covid19 it had a diversified supply chain and sufficient working capital for the medium term.

Dresel said that the group had been focusing on establishing and growing its overseas physical presence in the US, the UK and Finland. Unlike emerging markets, these countries tended to have system-integrator businesses that could buy their products.

Alaris Holdings, which sells broadband antennas and allied products, also said Finlandbased Cojot benefited from large sales orders secured at the end of the previous period.

Alaris, which has a market capitalisation of R251m, said late invoicing had further boosted its cash position, which stood at R85.1m at the end of the period, from R18.4m previously.

Despite the positive financial results, the Alaris share price was unchanged for most of Tuesday’s trading session, and it was 2% down at R1.96 at the close of trade.

Kaplan said there had not been much trade in Alaris shares as small-cap stocks had fallen out of favour with investors. Scandals and failings at other technology businesses like EOH had added to this “jitteriness”, he said.