Alaris Holdings is one of South Africa’s biggest technology success stories. It is a leader in the defence antenna technology market, with clients across the globe.
Alaris Holdings was previously the defence division of Poynting, and after rebranding acquired Finland-based Cojot – which also operates in the defence antenna market.
Alaris mainly sells to international customers with a truly global footprint.
Sales to the Americas, Europe, the Middle East and Africa, and South Africa are all significant as seen by looking at the cumulative percentages sold to these regions over a three-year period.
It should also be noted that the majority of South African sales are ultimately destined for international markets via local multinational defence companies.
Former Poynting CEO and Alaris shareholder Andre Fourie estimates that over 95% of Alaris products over this period were destined for global markets.
Strong revenue and profit
Growth for Alaris over the last four years has been impressive, as illustrated by its interim first-half results for 2018.
Alaris showed a turnover of R103 million over the six-month period, with profit after tax (PAT) of R26.8 million.
Based on these numbers, Alaris has seen a 34% compound growth in revenue from 2013 to 2018, and 43% growth in PAT for the same period.
Fourie highlighted that the price-earnings ratio for Alaris is 11.6 and is set to drop to 5.1 – based on the median of the trading update.
This reduced P/E ratio is due to the considerable increased interim profits, combined with significant reduction of shares in issue.
Curiously, however, the Alaris share price dropped from 334c in June 2014 to 180c in Dec 2017, while profits increased from R15.8 million to annualised R53.6 million over the same period.
“I believe it is mainly due to the convoluted historical numbers and fact that few journalists and analysts are interested in spending much time on analysis of such a small cap company,” said Fourie.
“I clearly am a major shareholder, and by definition biased from that perspective, but still believe these numbers provide some clearer perspective.”