Listed electronic equipment group Allied Electronics Corporation Limited (Altron) on Tuesday reported a 17% increase in headline earnings per share to 161 cents for the year ending February 28 2005, from 138 cents a year ago. The group declared an ordinary dividend of 63 cents per share — an increase of 21% from 52 cents previously.
Revenue rose by 22% to R12,2-billion, compared with R10-billion in the prior year, based on strong organic growth as well as the contribution from recent acquisitions in the form of NamITech, Altech Econet Wireless (previously known as Econet Wireless Global) and CS Holdings.
Diluted basic earnings per share increased to 134 cents from 109 cents previously.
The group said that the effect of these acquisitions, combined with improved operating margins, resulted in operating income increasing by 35% from R718-million to R968-million.
Operating margins showed an overall improvement from 7,1% to 7,9%.
The group’s balance sheet remains strong, with cash and cash equivalents at R1,5-billion, down from R2-billion at the end of the last year — notwithstanding that more than R1,2-billion was invested during the year in related investments.
These included Altech’s acquisition of 85% of NamITech, 50% plus one share of Econet Wireless Global and the purchase by Altech of 7,6% of its issued shares from Altron, which are currently held as treasury stock. BTG in addition acquired CS Holdings, effective November 17 last year.
These outflows were partially offset by strong operating cash flows, improved cash flow from working capital management and cash proceeds from the black economic empowerment (BEE) equity partners.
Outstanding performances were achieved by Autopage Cellular, Netstar, NamITech, Isis, Alcom Matomo and Alcom Radio Distributors.
With all export customers requiring dollar-denominated pricing, the volatility and strengthening of the rand created pressure on the results of UEC Multi-Media, despite an 8% increase in unit volumes over the previous year.
The group said the launch of the Altron Transformation Vision 2010 document, which is essentially a group internal charter and scorecard, took place towards the end of the year and reflected its commitment to preparing its companies for the implementation of the information and communications technology and other relevant charters applicable to the group’s operations once they have been finalised.
In line with the Altron Transformation Vision 2010 targets, the group has made significant progress with regard to equity deals with BEE broad-based partners at either holding-company or operating-company level throughout the group.
The group added that with regard to its equity partners, it is now focusing on creating “anchor” partners in its three main operating companies, being Kagiso within BTG SA, Izingwe within Powertech, and Pamodzi within Altech and Kagiso within BTG.
Looking ahead, the group said economic confidence in South Africa is strong, driven by declining interest rates, a stable inflationary environment and accelerating gross domestic product growth.
“We anticipate that these conditions will continue in the forthcoming financial year. This has resulted in buoyant local trading conditions. The continued strengthening of the rand has impacted exports, but this was more than offset by strong performances in the South African market.”
The group added that investment in the infrastructure and in the building and construction sectors, primarily due to government expansion programmes and low interest rates, has continued to be beneficial to the group and, in particular, to Power Technologies, which operates in the power electronics sector.
In the telecoms sector, opportunities continue to arise due to the announced liberalisation of the telecoms market in South Africa, the company said.
“Conditions in the IT sector are improving with profitable growth opportunities in niche technology areas.” — I-Net Bridge