JSE-listed technology company Allied Electronics (Altron) has achieved double-digit growth in revenue and earnings before interest, taxes, depreciation and amortisation (Ebitda) from continuing operations during the six months to August 31, 2020.
The group’s Ebitda increased 17% to R883-million for the first half of the year, while revenue increased 14% to R8.4-billion.
Headline earnings a share from continuing operations expanded 28% to 83c, while basic earnings a share increased 27% to 85c.
"The theme of our first-half results has been dominated by the impact of Covid-19, which coincided with the start of our financial year,” said Altron CEO Mteto Nyati.
However, he highlighted that the group’s management was well prepared for the restrictions and proactively managed the cost base and liquidity risk.
Dealing with the liquidity risk, management immediately reviewed all and reduced all non-essential capital expenditure, deferred and reduced executive bonus payments relating to the prior year, rolled backed salary increases and started early discussions to secure additional liquidity as a precaution under the volatile economic environment.
While the operations overall were resilient and many of the group’s key metrics increased during the half-year under review amid a national lockdown and subsequent restrictions, Altron required additional cost reduction measures as the lockdown extended beyond the initial three weeks, he explained.
Altron People Solutions and Business Process Outsourcing were negatively impacted by the measures taken to mitigate the pandemic; however, several operations had benefited, including the Bytes UK operations, Altron Karabina and Altron Security.
Altron’s Document and People Solutions businesses, as well as Altron Arrow electronic component distribution operation, have been identified as units that do not fit Altron’s future strategy. These businesses are being treated as held for sale as management explores exit opportunities.
“Severance pay as a result of Section 189 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, losses of R35-million were incurred as a result of the volatility in currency owing to the global pandemic,” Nyati commented.
Altron Nexus’ turnaround strategy, implemented last year, has seen the subsidiary return to profitability, reporting Ebitda of R56-million.
Altron declared a dividend of 33c a share for the six months to August 31, 2020, an increase of 14% compared with the corresponding period last year.