Our opinion on the current state of ALTRON-A(AEL)
Allied Electronics Corp, or Altron (AEL), is an information and communications technology company founded by Bill Venter in 1965. Recently, the company has been refocusing on its core business, which has involved selling its 80% stake in Powertech and its 100% subsidiary, Altech UEC (a developer of set-top boxes). Powertech was also sold to a BEE consortium. Altron is currently in the process of selling CBI Telecom Cables. The company operates in six African countries, as well as the UK and Australia.
Altron has reported "...secured key wins in both the public and the private sector...", including the Gauteng Broadband Network phase 2 contract and FNB's data and analytics contract. Netstar, another Altron venture, won a three-year contract for vehicle tracking for 7000 vehicles in eThekwini. Bytes, in the UK, which has now been unbundled and separately listed both in the UK and in an inward listing on the JSE, secured a 5-year contract for Windows 10 from the NHS (UK). Altech is restructuring its debt to reduce its interest bill and has resumed paying dividends. They acquired Phoenix Software in the UK for R698m.
On 17th December 2020, Altron announced the successful listing of its subsidiary Bytes Technology on the London Stock Exchange (LSE) at a price of GBP2.70. This event unlocked considerable value for Altron shareholders but resulted in a "cliff" in the Altron share price chart.
In its financial results for the six months to 31st August 2023, Altron reported a revenue increase of 4% and headline earnings per share (HEPS) up 19%. The company noted, "Altron Group results were impacted by provisions and impairments (collectively referred to as the 'Non-Cash Adjustments') raised in two non-core subsidiaries, namely Altron Nexus of R334 million, in relation to the restructuring of Altron Nexus due to the loss of the Gauteng Broadband Network contract and the City of Tshwane exposure, and Altron Document Solutions of R95 million. This includes the goodwill impairment raised at Altron Group level of R33 million in relation to Altron Nexus."
In a trading statement for the year to 29th February 2024, Altron estimated that HEPS from continuing operations would increase by between 35% and 38%. The company elaborated, "Normalising for the sale by Altron Managed Solutions of its ATM Hardware and Support Business (the 'ATM Business'), which was effective 1 July 2023, the Group's Continuing Operations are delivering year-to-date revenue growth, with double-digit growth in EBITDA and Operating Profit."
Technically, the share has been moving sideways between 750c and 1330c since December 2020. At its current price, it is trading below its net asset value (NAV), but it is now in an upward trend.
Altron has reported "...secured key wins in both the public and the private sector...", including the Gauteng Broadband Network phase 2 contract and FNB's data and analytics contract. Netstar, another Altron venture, won a three-year contract for vehicle tracking for 7000 vehicles in eThekwini. Bytes, in the UK, which has now been unbundled and separately listed both in the UK and in an inward listing on the JSE, secured a 5-year contract for Windows 10 from the NHS (UK). Altech is restructuring its debt to reduce its interest bill and has resumed paying dividends. They acquired Phoenix Software in the UK for R698m.
On 17th December 2020, Altron announced the successful listing of its subsidiary Bytes Technology on the London Stock Exchange (LSE) at a price of GBP2.70. This event unlocked considerable value for Altron shareholders but resulted in a "cliff" in the Altron share price chart.
In its financial results for the six months to 31st August 2023, Altron reported a revenue increase of 4% and headline earnings per share (HEPS) up 19%. The company noted, "Altron Group results were impacted by provisions and impairments (collectively referred to as the 'Non-Cash Adjustments') raised in two non-core subsidiaries, namely Altron Nexus of R334 million, in relation to the restructuring of Altron Nexus due to the loss of the Gauteng Broadband Network contract and the City of Tshwane exposure, and Altron Document Solutions of R95 million. This includes the goodwill impairment raised at Altron Group level of R33 million in relation to Altron Nexus."
In a trading statement for the year to 29th February 2024, Altron estimated that HEPS from continuing operations would increase by between 35% and 38%. The company elaborated, "Normalising for the sale by Altron Managed Solutions of its ATM Hardware and Support Business (the 'ATM Business'), which was effective 1 July 2023, the Group's Continuing Operations are delivering year-to-date revenue growth, with double-digit growth in EBITDA and Operating Profit."
Technically, the share has been moving sideways between 750c and 1330c since December 2020. At its current price, it is trading below its net asset value (NAV), but it is now in an upward trend.
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