Non-core sales give Altron profits boost

ALLIED Electronics Corporation (Altron) boosted its profits yesterday for the six months to end August, as it reduced its exposure to the manufacturing sector and divested its non-core assets.

Profit from continuing operations increased 81.55 percent to R187 million, up from R103m, while losses from discontinued operations declined to R37m as compared with a R618m loss reported in the previous corresponding period.

Chief executive Robbie Venter said: “Altron’s non-core businesses, which predominantly operate in the manufacturing sector, have continued to experience difficult trading conditions, although we have seen the benefit of the restructuring that occurred last year in several of these operations. These factors have resulted in a significant reduction in the losses generated from the discontinued operations.”

The group improved revenue, which rose 10 percent to R7.54 billion from R6.8bn. Earnings per share before interest, tax, depreciation and taxation grew by 18 percent to R445m, while headline earnings per share increased 10 percent to 54 cents per share, up from 49c per share in the previous corresponding period.

The group has made inroads in reducing its debt levels after successfully revising its company strategy. Venter said the group had managed to reduce its debt by R1.5bn from the disposal of Altech Autopage and Aberdare Cables.

Increase in profit from continuing operations

Venter said the disposal of the remaining non-core assets remained the group’s main priority to release capital to further strengthen the balance sheet and enable further investment into the core businesses.

During the previous financial year Altech Autopage, Altech Node, Altech Multimedia and the Powertech group were presented as discontinued operations and the assets have been classified as held for sale by Altron.

The group’s core businesses had shown resilience over the past two years.

“The group’s main offshore presence in the UK faces its own economic challenges given the recent Brexit decision. While this may dampen economic confidence in the region, it is not expected to have a material impact on these businesses, although the weaker pound will impact the contribution from these operations to the group’s results,” Venter added.

The group said it would move away from a familyowned business to an independent group in the future. Shares closed 0.58 percent up at R6.88 on the JSE yesterday.