Altron diluted earnings up 33%
Altron's dividend was 32% higher at 156 cents from 118 cents previously.
Revenue was 25% higher at a record R21.4 billion, while operating profit grew 27% to R1.9 billion.
The group said that encouragingly, all three of its operating companies – Altech, Bytes and Powertech – recorded strong growth with headline earnings per share increasing by 23% at Altech while Bytes and Powertech increased headline earnings by 23% and 39%, respectively.
Chief executive Robert Venter said the "excellent" results confirmed the strategic initiatives put in place over the last few years and thesustainability of the business model.
"We have invested significantly both internally and through acquisitions and this combined with strong operational disciplines have laid the foundation for our performance. We are pleased with the improvement in our operating margin to 9.0%, this being achieved predominantly on the back of Powertech enhancing its operating margin from 10.1% to 11.4% as the benefits of operational leverage and high capacity utilisation flow through," he said.
Venter said the group invested R484 million in replacement as well as capacity expansion during the year, mainly focused on the more capital intensive power electronics sector.
Depite higher trading volumes and increased raw material prices, the group's working capital was well managed during the year, particularly in respect of inventory resulting in a roughly neutral investment in working capital notwithstanding the 25% increase in revenues.
Overall, Powertech contributed 54% to Altron's headline earnings number.
Highlighting Aberdare Cables as one of the largest contributors in the Powertech group, Venter said its local operation, which continued to perform well with revenue growth of 32%, was assisted by the inclusion of an additional eleven months of trading from its telecoms joint venture with Reunert, which contributed 451 million rand for the period under review.
Its international operations also exceeded R1 billion in revenue for the first time.
According to Venter the impact of local power outages and political changes combined with the global financial market turmoil, has impacted negatively on general market sentiment, although demand for infrastructure development is continuing at the expected pace in both the public and private sectors despite an increasing domestic interest rate environment.
Government's focus on infrastructure spend to create GDP growth and job creation creates an environment conducive to strong demand for the group's products.
"The weakening of the rand has had a mixed effect on Altron's businesses resulting in improved earnings from foreign operations for certain companies while conversely leading to increased costs and reduced margins for others," he said.
Looking ahead, Venter commented: "We are pleased with the excellent trading results achieved by our group during the year under review, but we are aware that the uncertainties in the economic environment at present makes it challenging to predict how our businesses will be impacted in the year ahead. I am, nevertheless, confident that the group will continue to experience positive growth for the forthcoming year albeit it is unlikely to be at the high levels achieved over the last two years."
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