Altron spent R342 million on growth initiatives in the six months to August 31 that included capital rental devices in Netstar and Altron FinTech, new ventures such as the Altron AI Factory and a patient app for Altron HealthTech’s oncology solution.
Altron’s recently launched, and South Africa’s first operational AI Factory, provides South African companies with enterprise-level AI infrastructure and services, while maintaining data sovereignty and regulatory compliance. The platform is currently live with five launch customers, which include Dataviue, Lelapa AI, and MathU.
CEO of the JSE-listed ICT group Wener Kapp said they were pleased with the “strong financial performance” and returns in the Platforms segment, where investment was continuing in line with strategy, and the strong financial position and cash flow generation during the six months had allowed a 20% increase in the interim dividend to 48 cents.
Altron’s share price fell 8.32% to R16.87 on Monday afternoon on the JSE, a price also lower than the R18.70 that it traded at a year ago.
“We anticipate ongoing challenges for IT Services in the near term. Our priority remains investing in our Platforms, which deliver significant value for shareholders. We’re focused on executing our strategy, managing capital efficiently, making strategic investments, and driving sustainable, profitable growth to enhance shareholder value,” Kapp said in a statement.
Operating profit from continuing operations increased 15% to R549m. Headline earnings a share from continuing operations climbed 22% to 96 cents. A tough trading environment in IT services led to a 1% decline in group revenue to R4.8 billion; however, a focus on higher margin annuity revenue streams caused further improvements in profitability.
Group earnings before interest, tax, depreciation, and amortisation increased 2% to R905m.
Netstar subscribers increased by 11% to 2.1 million. Revenue grew 8% to R1.2bn, and operating profit was up by 54% to R225m. The South Africa operations delivered a strong performance, with Netstar’s Global Fleet Bureau and the extension of the StarTag products enhancing the value proposition.
In Australia, where business growth slowed, corrective actions were being implemented that were showing positive results. The Australia business expected to break even for the full year.
Altron FinTech reported 24% revenue growth and a 20% rise in operating profit to R257m, driven by demand from small and medium enterprise customers for its collections and payment platform, as well as strong rentals and sales of point-of-sale devices.
Altron HealthTech revenue was flat at R201m, with double-digit growth in platform license fees offset by lower corporate project revenues. Operating profit grew by 20% to R65m.
“The encouraging adoption of data-driven services continues, including the recent launch of South Africa’s first oncology companion app, ThriveLink, assisting cancer patients with care coordination and easing administrative burdens.
Altron Digital Business experienced muted IT spending by major South African enterprises. Revenue fell 10% and the business posted a R42m operating loss. The business has taken corrective action to return to profitability, said Kapp.
Altron Security revenue increased 2% to R252m, with good growth in software and managed services increasing annuity revenues. Operating profit increased 6% to R70m.
Altron Document Solutions increased operating profit 65% to R33m, despite a 5% revenue decline to R697m. The business had adapted well to changing markets, developing its eco-range and digital solutions, leading to strong results as customers sought cost-effective and secure ways to digitise, automate, and manage business information.
Altron Arrow was impacted by the global slowdown in the electronic component distribution sector, with revenue falling 23% and operating profit down 49% to R18m.
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