Altron’s share price continued an inexorable climb upwards yesterday after it lifted headline earnings per share of ongoing operations by over 100% to 79 cents for the six months to August 31.
The 59-year-old JSE-listed information and technology systems group yesterday reported strong growth in profitability, primarily driven by the performance of the Platforms segment. The interim dividend increased 60% to 40 cents a share.
Altron’s share price was last seen up by 2.76% at R18.62 on the JSE yesterday afternoon, 127% higher than the price it was trading at the same time last year.
CEO Werner Kapp said the leverage in their platform businesses led to “excellent segmental performance as we continued to add scale. Our customer-centric focus and higher margin annuity revenue mix, are laying a strong foundation for future performance”.
At the last year-end, profit improvement and other strategies led to improved performance in the second half, the momentum of which continued into the 2025 financial year, resulting in a stronger performance in comparison to the first half of 2024, which had also been negatively impacted by provisions and impairments.
From March 1, 2024, the group reorganised into three operating segments: Platforms comprising the Netstar, Altron FinTech, and Altron HealthTech businesses; IT Services comprising the Altron Digital Business, Altron Security and ADS businesses; and Distribution which comprises the Altron Arrow business.
Altron Nexus continues to be classified as held-for-sale in discontinued operations.
Revenue came to R5.1 billion, down by 6%, impacted by the sale of the ATM Business and a decrease in Altron Nexus’ revenue. The ATM Business of Altron Managed Solutions was sold from July 1, 2023, with four months trading included in the comparative results.
Altron Document Solutions (ADS) was reclassified as a continuing operation following a review of options. ADS made a positive earnings before interest, taxes, depreciation, and amortization (EBITDA) contribution of R30m from an EBITDA loss of R123m previously.
In Altron management’s view, the most meaningful comparison was the performance of continuing operations, adjusted for the sale of the ATM business and excluding ADS.
On this basis, revenue grew 4% to R4.2bn. EBITDA improved 23% to R870m, with operating profit increased 29% to R452m. HEPS increased to 72 cents from 48 cents.
The Platforms segment grew revenue by 10% to R1.9bn, with EBITDA growing 37% to R776m and operating profit up 47% to R415m.
Altron FinTech grew revenue 10% to R607m off a high comparative base, supported by an increase in higher-margin annuity revenue from 69% to 82%. Operating profit increased 63% to R215m.
Altron HealthTech increased revenue 6% to R201m and operating profit grew 8% to R54m. The corporate segment added 7 new logos and grew revenue 22%, supported by larger switching revenue and growth in occupational health.
The IT Services segment generated revenue of R2.6bn, reflecting an 8% decrease, primarily due to the sale of the ATM business. Operating profit increased to R120m from R3m – the prior year was negatively impacted by a R95m provision.
The integration of Altron Systems Integration, Altron Karabina and Altron Managed Solutions into Altron Digital Business was progressing.
The profitability of Altron Digital Business was negatively impacted by non-recurring project expenses relating to contracts that have now been closed, and three project delays that had subsequently commenced in the second half.
Altron Security experienced a 12% decline in revenue to R247m due to capex constraints at a large customer and a change in the revenue mix between agency and principal revenue. Operating profit increased 1% to R66m.
ADS revenue increased 11% to R731m, supported by new logos and an increase in public sector contracting. The business turned in an operating profit of R20m.
Altron Arrow reported revenue of R376m, down 11% as the electronic component distribution industry was entering a global cyclical downturn to pre-Covid levels. Operating profit fell 5% to R35m.
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