Altron has announced an increase in EBITDA of 14% to R1.8 billion for the year ending February 2020, while revenue increased 6% to R16.7 billion during the period.
Headline earnings per share from continuing operations were up 2% to 182 cents while basic earnings per share increased by 4% to 184 cents.
In light on the current economic upheaval from the COVID-19 pandemic and uncertainty going forward, Altron said it will preserve cash by declaring a final dividend that is 40% less than would otherwise have been declared.
Altron’s medium-term guidance to double five-year EBITDA by 2022 remains unchanged.
“My executive team and I have continued to embed the culture of collaboration across all our operations,” said Altron CEO Mteto Nyati.
“This has enabled us to better service our customers through delivering the full breadth of our expertise, solutions and product offerings.”
He said Altron has received sizeable contract awards from Bet 365, Prudential, national government organisations, Standard Bank, Capitec, Coca-Cola and Barloworld.
Despite low economic growth in South Africa and Brexit concerns in the UK, Altron’s operations continued to deliver growth.
Bytes UK, which Altron is potentially unbundling to unlock value for shareholders, outperformed the market, with an EBITDA up by 66% to R611 million.
Netstar also delivered strong customer growth of 16.5%, and it has announced the launch of its global connected-car partnership with Toyota and Vodacom.
“We have seen an increase in interest from customers for more resilience in their remote information technology capabilities,” said Nyati.
“As a key supplier of IT services into a market that needs greater security, resilient remote working capabilities and hybrid cloud, together with a revenue base that is 62% annuity income, this will provide a defensive platform to weather the COVID-19 storm.”
To limit the impact on profitability that COVID-19 is set to inflict, a number of cost savings initiatives have been implemented for the 2021 financial year.
This includes cancelling all cash absorbing projects, and freezing recruitment, promotions, and salary increases.
The company will also halve all bonuses for group executive officers, managing directors, and first line managers for the 2020 financial year.
For the current financial year, Nyati said Altron will focus on:
- Converting the cloud computing pipeline projects of Altron Karabina into revenue in South Africa.
- Improving the profitability of Altron Nexus.
- Integrating Ubusha into the group.
- Capitalising on the digital transformation agenda to meet customer needs through offering a One Altron solution.
“We will also assess prevailing market conditions to forge ahead with the unbundling of Bytes UK at the most opportune time.”