As JSE-listed Altron successfully transitioned from a family-controlled and managed business to an independent management structure, newly appointed successor to Robbie Venter, CEO Mteto Nyati on Thursday promised to aggressively drive a strategy aimed at returning the company to its previous fortunes.
During the year ended February 28, Altron had made “good progress” in navigating the difficult environment which had pushed the group into losses in recent years, with earnings recovering somewhat as it repositioned itself in the information technology and telecommunications space.
After one month in his new position, Nyati said he was bullish on the company’s future, with an advantage to be seen in the "pioneering expertise" within Altron, its employees, service offerings and room for expansion, the opportunities open to the company, its own intellectual property and the capability backing the information and communication technology (ICT) giant.
“Standing here in front of you after one month [at the helm], I am hopeful and I see a bright future,” he told investors at the company’s year-end financial results presentation, in Sandton, highlighting the various innovative achievements of Altron.
However, things will be done differently in an ever-changing environment with new opportunities and the company is now pursuing a full review of the strategy for the growth of the core businesses.
The review will include the options of closing any capability or resource gaps that exist and synergising the various capabilities already within the group with the four focus areas – healthcare, financial inclusion, safety and security and training and development – that will define the company in the future, Nyati told Engineering News Online in an interview following the presentation.
“We will continue to aggressively drive cost efficiencies; recruit, develop and retain top talent; build a trusted ICT brand; and accelerate growth. As we move into the new financial year, there will be an increased focus on customer engagement, which will be driven by collaboration between Altron businesses to identify synergies in order to move our business operating model from a point-solutions provider to an end-to-end solutions provider,” Nyati added.
Altron had, during the year under review, reduced its exposure to the manufacturing sector through several divestments while cutting the group's debt by 42% to more sustainable levels.
“The disposal of the remaining noncore assets remains a priority in order to release further capital to strengthen the balance sheet and enable further investment in the core assets,” he said, adding that it was likely that the disposals would be concluded during the next financial year.
Specific focus was placed on the Powertech Transformers and Altech Multimedia disposals.
Altron’s recovery will also be bolstered by a capital injection of R400-million by its new strategic partner, Value Capital Partners.
The investment provides Altron with the added flexibility to implement its growth strategy in its core businesses, continue the exiting of the noncore manufacturing assets and create capacity for acquisitive growth.
Value Capital Partners' turnaround expertise will also assist Altron in developing the strategy that would define the group’s future direction.
Altron’s headline earnings a share shifted back into positive territory of 71c in the financial year ended February 28, compared with the 145c loss posted in the prior year, while the group’s basic loss a share narrowed from 259c in 2016 to a loss of 54c during the financial year under review.
Group earnings before interest, taxes, depreciation and amortisation surged 123% to R840-million during the year, while revenue decreased 26% year-on-year to R19.7-billion.
Altron’s overall net debt decreased from R3.4-billion in 2016 to R1.9-billion in 2017, owing to the disposals and repayment of debt.