Allied Electronics Corporation (Altron) produced startling=20 results for the year to end-February, causing its share=20 price to reach a high of 1 000 cents — well up on last=20 year’s 700 cents a share.
Since January 1993 the electronics sector has performed=20 abysmally. Now Altron’s results herald the return to=20 prominence of a sector which has been avoided by investors.
Altron pushed its turnover up by 20 percent to R3,9-billion=20 and operating income up by 15,5 percent to R336,7-million.=20 These figures translate into an attributable income=20 increase of 17,9 percent to R122,6-million, or the same=20 percentage increase in earnings per share to 127,7 cents.
“Without the impact of the transitional levy, earnings per=20 share would have been 134,8 cents — an increase of 24=20 percent,” say Bill Venter, in his company’s annual=20 financial statements.=20
What is impressive about the results, is that they were=20 achieved despite problems within the industry.
Venter attributes industry problems to: “The increase in=20 the number of public holidays and labour unrest related to=20 annual wage demands, which caused poor levels of=20 productivity and efficiency, particularly in the first=20 half.” Yet Altron’s operating profit margins remained at a=20 high of nearly nine percent for 1994-1995.
Experts suggest that Altron’s strength lies in its sound=20 management. The group’s financial profile, as exhibited in=20 its balance sheet, highlights its management capabilities.=20 Despite net cash and deposits declining by nearly 40=20 percent, its total assets rose to R2,4-billion (1994: R2,1- billion). Net asset per share rose by 13 percent to 640=20 cents a share.
As for next year, will the group continue to impress=20 investors? Venter says: “Since the elections, South=20 Africa’s political climate has markedly improved with=20 economic prospects showing considerable promise. The=20 challenge ahead will be of entering and competing in=20 international markets.”