JSE-listed technology company Altron posted a 37.8% increase in headline earnings per share (HEPS) to 51c apiece, and a 82.9% increase in normalised HEPS to 75c a share during the year ended February 28, 2022.

This is despite a “tough” year owing to the sustained Covid-19 pandemic, a global shortage of electronic components and semiconductor chips, and significant cutback on capital expenditure by large enterprise customers.

“We delivered a solid performance growing revenue by 5.7% year-on-year, with double-digit growth in operating income and HEPS at 34.2% and 37.8% respectively,” said outgoing CEO Mteto Nyati.

Revenue grew to R7.9-billion in the year under review, from R7.5-billion the year before, while operating income increased to R498-million, compared with R371-million the previous year, following several key wins.

“This performance was driven by the resilience of our Own Platform segment that is characterised by high annuity revenue; the turnaround of Altron Karabina and Altron Managed Solutions; exceptional performance of Altron Arrow and a strong focus on cost reduction at the centre,” he explained.

The company’s Own Platform delivered revenue growth of 6.2% to R2.9-billion, while operating income of R546-million exceeded the prior year’s by 16.9%, owing to gains from Netstar, Altron FinTech and Altron HealthTech.

Netstar recorded a 7.8% increase in revenue to R1.7-billion, supported by a strong performance in Australia, while the South African business continues to stabilise operational issues that have placed pressure on its subscriber churn rates during the period, leading to consistent net subscriber growth since June 2021.

Altron FinTech increased its revenue by 4.5% to R854-million and its operating income by 43% to R193-million, boosted by two new insurance products, namely funeral cover and credit life and short-term bridging financing for customers in the microfinancing space.

Altron HealthTech’s revenue expanded 2.9% to R323-million year-on-year.

“With the investment into its new platform, Altron HealthTech will be able to capture the next generation of medical practitioners, which has been a challenge owing to the current ageing technology and offerings,” Nyati commented.

Meanwhile, Altron is making good progress in setting up “Altron 2.0” through the disposal of capital heavy and loss-making businesses and the acquisition of assets in high growth segments of the market, said Nyati.

Altron 2.0 is characterised by the financial metrics and key performance indicators of high annuity revenue; capital light; own intellectual property; a net debt to Ebitda ratio of <1; software and high-value services; and differentiated offerings in cloud, security, data and software application development.

During the year under review, Altron acquired digital security company LAWtrust to strengthen Altron Security and finalised the process of selling Altron Document Solutions to BiAfrica, which is pending Competition Commission approval.

It also sold Altron People Solutions’ business process outsourcing unit, as well as the learning solutions business.

“Other achievements as it moves towards successfully implementing Altron 2.0 include turning around Altron Karabina and Altron Managed Solutions, Altron Arrow becoming a R500-million business, Altron Nexus collecting over R900-million in debt – mainly from the public sector amid the Covid-19 pandemic – and head office costs being reduced by R98-million.”

Moving forward, while Altron expects continued pressure on supply chain and pricing owing to the global component shortage, the resilience of the Own Platform segment should carry through into the first half of the 2023 year and Altron FinTech expects a strong performance in the start of the new financial year.

“Within the digital transformation segment, a strong focus will be placed on the turnaround of Altron Systems Integration to improve its performance. The segment will be strengthened by Altron Security’s performance with the addition of LAWtrust,” he assured.

Further, Altron Karabina is expected to continue its strong growth trajectory against the first half of 2022.

The company is also in advanced discussions with a potential buyer to acquire Altron Managed Solutions’ banking business as it moves towards its strategic objective of being a capital-light organisation.

Altron declared a dividend of 30c a share, an increase of 100% year-on-year.