JSE listed Allied Electronics Corporation Limited (Altron) today announced its interim results for the six months ended August 2011. Revenue decreased marginally by 2% to R11.5 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) decreased 6% to R932 million against the comparative period in August 2010.
“Altron’s diversified portfolio, which comprises investments in the telecommunications, power electronics, multi-media and IT sectors, provides a certain amount of resilience during the volatile market conditions that we are currently experiencing. We saw an excellent performance from the Bytes group, with Powertech and Altech experiencing some issues in certain of their businesses, resulting in a muted overall performance from these two groups,” said Altron Chief Executive, Robert Venter.
Bytes reported good results from virtually all of its operations, with EBITDA improving by 19% to R246 million despite revenue decreasing by 6% to just under R3 billion. If the effect of the National Health Services UK contract (which was once-off in nature) in the prior period is excluded, revenues would have shown growth of 9%.
“Bytes Systems Integration and Bytes Managed Solutions were the star performers although almost all of the businesses within the Bytes group showed good profitable growth,” said Venter.
The good results from Bytes were primarily achieved from organic growth although the group did conclude the acquisition of security software distributer, Security Partnerships Limited, on 1 August 2011. The acquisition complements the existing software services business in the UK.
“The Security Partnerships acquisition helps us to diversify the Bytes UK business, which historically focussed principally on Xerox distribution and Microsoft licencing,” said Venter.
Altech’s revenue increased by 1% to R4.8 billion on prior year levels and EBITDA declined by 10% to R456 million. Altech Autopage Cellular, Altech Netstar and Arrow Altech Distribution performed well but the group was influenced by tough market conditions in both Altech East Africa and Altech West Africa.
Altech continued the acquisition trend within the Altron group, acquiring two business post the interim period i.e. Eyenza Mobile Money, an e-wallet based payments system, and SetOne GmbH, a Germany-based supplier of digital video broadcasting (DVB) based products and solutions company. Both of these companies will only start contributing toward Altech’s bottom-line from the next reporting period.
Powertech’s transformer, batteries and system integrators businesses performed exceptionally well but the group’s overall performance was impacted by the cable business which was negatively influenced by the difficult market conditions in Iberia, the continued subdued state of the building and construction industry and the two week Metalworkers strike in July 2011. Powertech’s revenue remained stable when compared to the previous interim period, declining marginally by 2% to R3.7 billion. EBITDA, however, reduced by 13% to R233 million.
“Powertech has done extensive analysis on costs and efficiency over the last few years and this is set to continue for the remaining six months of the financial year. The cable business in particular with benefit from these efficiencies once the building and construction sector recovers,” said Venter.
On 3 October, Powertech entered into a Joint Venture with EnerSys, a NYSE listed, global leader in stored energy solutions for industrial applications, by selling 50.1% of its industrial battery business incorporating Battery Technologies, Rentech and Willard Industrial Division to EnerSys. The transaction, which combines the technological know-how of both entities, provides Powertech with access to new products and markets in Sub-Saharan Africa.
“Going forward, Altron will focus on growing revenue while leveraging off the low cost base that has been achieved over the last few years. This will be done by focusing on both organic growth and further acquisitions. Special attention will also be paid to getting the currently underperforming businesses back on track.”