South African tech company that doubled investors’ money in a year

Altron has been one of the best-performing stocks on the JSE during the past twelve months, with its share price climbing from around R9.90 to around R21 in a year.

In its latest half-year results for the six months ended 31 August 2024, Altron reported a swing from an after-tax loss of R315 million, to a profit of R276 million.

Looking at just its operating profit reveals an even more positive picture, with the company going from a R118-million loss to a net profit of R463 million.

The improvement in Altron’s share price began towards the end of 2023 after the company had offloaded its ATM business, announced that it was holding Altron Nexus for sale, and reported improvements in operating profits from its remaining divisions.

“We are in the early phases of our journey, however, the successful profit improvement strategies in Altron Systems Integration and Netstar, together with focused execution on our growth levers, have delivered pleasing results,” Altron CEO Werner Kapp said at the time.

Altron appointed Dimension Data veteran Werner Kapp as chief executive officer in October 2022, who has led the company’s turnaround.

In addition to announcing and executing the new strategy, Altron board members Antony Ball and Tapiwa Ngara bought a significant number of the company’s shares through Value Capital Partners in 2023.

Ball was a co-founder of private equity business Brait, while Tapiwa spent several years in Goldman Sachs’ EMEA Investment Banking Division in London.

From a low of around R9 since February 2024, Altron’s share price hit highs of R25 in January 2025 before retreating to under R21 per share last week.

This suggests that the company, its management, and its chief executive have regained the market’s confidence.

Altron’s share price languished since it unbundled Bytes UK and listed it separately on the London Stock Exchange as Bytes Technology Group Limited in 2020.

Bytes is a UK-based IT software solutions company specialising in cloud and security products. Altron acquired Bytes in 2008 for R14 billion.

The unbundling was seen as a way to unlock shareholder value as Bytes within the Altron conglomerate was not priced fairly.

Bytes was one of Altron’s most valuable assets. After it was unbundled, Altron’s revenue fell by R8.3 billion.

Bytes was also Altron’s biggest profit driver. In the final two years that Bytes’ results were reported within the Altron group, it contributed more than 80% of Altron’s total net income.

By 2022, Altron was reporting a net loss, which deepened to an after-tax loss of R164 million during its 2024 financial year across its continuing and discontinued operations.

In its half-year financial report, Altron showed that its revenue, operating profit, operating profit margin, headline earnings, and dividend per share were all on a positive trajectory.

Altron said its strong growth in profitability was primarily driven by the performance of the Platforms segment, which comprises Netstar, Altron FinTech, and Altron HealthTech.

The company’s Platforms segment grew revenue by 10% to R1.9 billion, with earnings before interest, tax, depreciation, and amortisation growing 37% to R776 million.

Operating profit across the segment was up 47% to R415 million.

Altron summarised the improvements across its core metrics in the charts below.

Additionally, Altron reported that its working capital increased by R144 million to R1.6 billion, reflecting the growth in the business, particularly in the Platforms segment.

“Altron continues to execute on its strategy to become the leading platform and IT services business in its chosen markets,” Kapp stated.

“Despite the tough economic conditions, we have demonstrated our resilience through our customer obsession and innovative solutions, high annuity income base, and focus on execution.”

Kaap said Altron remained on track to achieve its medium-term targets of a 19% operating margin increase in its Platforms segment, and a 7% increase across its IT Services segment.

“With the inclusion of Altron Document Solutions in continuing operations, together with its successful profit improvement strategy, we have increased our operating profit target for continuing operations to R1.15 billion by FY26.”