Altron has published its unaudited financial results for the six months ended 31 August 2020, which reflect the impact of the COVID-19 pandemic on the business.
The results showed that headline earnings per share from continuing operations were up 28% to 83 cents while basic earnings per share increased by 27% to 85 cents.
“Despite the economic upheaval from Covid-19 pandemic, the Board decided to pay an interim dividend of 33c per share, up 14% from the previous interim period,” said Altron Group CEO Mteto Nyati.
The impact of COVID-19 on the business has been severe, however, with 600 jobs being cut across the group and a number of business units being discontinued.
Altron said that the Document and People Solutions and Altron Arrow businesses are being treated as held-for-sale with their operations discontinued.
Impact of COVID-19
Nyati said that Altron has a well laid out five-year roadmap, but this has been impacted severely by the COVID-19 lockdown.
There were a number of cost interventions in place to reduce the effects of the pandemic, and the company’s staff were well-equipped to work from home as 80% of its systems are cloud-based.
“Unfortunately, as the period of lockdown extended beyond the initial three weeks, it became clear that our initial cost interventions were not adequate,” Nyati said.
“Consequently, additional cost reduction measures were required, which led to 600 staff members being impacted across our South African operations.”
Severance pay as a result of retrenchments amounted to R19 million, while the initiative to roll back salary increases came into effect in May, resulting in two months of higher salary charges, amounting to R20 million.
In addition, Altron incurred losses of R35 million as a result of the volatility in currency due to the global pandemic.
“Our operations collectively proved to be highly resilient during the reporting period, which bore the brunt of lockdown levels 5 to 3,” he said.
He said that major capex expenditure projects placed on hold or delayed, which widely impacted hardware sales across the group.
Altron group delivered gross invoiced income growth of 34.9%, revenue growth of 7.0%, and EBITDA of 1.1% against the previous reporting period.
“Despite the difficulty of conducting business during COVID-19, we are very proud to have increased most of our key metrics year-on-year,” Nyati said.