Alaris aiming to grow global footprint with solid FY18 results

11th September 2018 By: Simone Liedtke - Writer

AltX-listed Alaris Holdings on Tuesday said its continuing operations performed well during the financial year ended June 30, with a number of large orders received from Europe and the Middle East.

During the period, the technology holding company managed to grow revenue by 17% from R159.4-million to R187.1-million, while net cash flow from operating activities increased by 229% from R13.3-million to R43.8-million.

Operations, Alaris noted, performed satisfactorily during this year, with the product mix being more focused on customisation and development according to client needs.

“The focused strategy which we established last year is bearing results. The three core strategic building blocks, being extensive expertise in radio frequency technology products, owning and developing intellectual property and the global reach of its products will remain valid for advancing the Alaris Group into the future,” group CEO Juergen Dresel commented.

SEGMENTAL OVERVIEW

Centurion-based Alaris Antennas, a business segment of the larger Alaris group, achieved a compound annual growth rate in profits of 19% over the past four years.

This success, the company enthused, can be attributed to the group’s values, with client centricity at the core.

Revenue, however, decreased slightly by 1% from R123-million to R122-million, with profit after tax decreasing by 7% from R34.9-million to R32.5-million.

Alaris Antennas added 48 new products to its portfolio in the financial year to support future top line growth, the company added.

“To ensure that we remain agile and are able to adapt to our clients’ needs in a quick and responsive way as the business grows, we have implemented various measures to ensure that our multidisciplinary teams are working on a common goal to deliver high quality products,” Dresel remarked.

In terms of prospects, Alaris Antennas’ competitive advantage is its ability to develop and hold its own intellectual property as it continues to invest significantly in research and development.

The highly skilled and specialised team of engineers helps with the objective of being the preferred supplier and partner of innovative radio frequency products. This remains a key differentiator for the South Africa-based company.

The company has invested in onsite environmental stress screening equipment, which includes a temperature and humidity chamber, as well as vibration equipment. This, Alaris said, will allow the group to further improve quality and customer service.

The installation is one of few in the southern hemisphere, and antennas can be tested thoroughly to ensure they withstand extreme environmental conditions. This ability adds to the uniqueness of the organisation, Alaris noted.

“The opportunities we have been involved in this past financial year have increased in size and relate to a wider geographical diversity. This supports our strategy of global growth and the diversification of our product portfolio,” added Dresel.

He explained that having the products designed locally by a team of engineers and manufactured at the Alaris premises in Centurion, distinguishes the business from value-added resellers and makes Alaris competitive in the global market. This results in about 90% of the revenue being received from exports.  

Finland-based Cojot Oy achieved significant revenue growth of 79% from R36.3-million to R65.1-million.

According to Alaris, three large orders from Europe and the Middle East contributed to this increase. Profit after tax increased by 288% from R3.9-million to R14.9-million.

“Management is very pleased with the profits contributed to the group from the acquisition date in May 2016, equating to about 68% of the initial purchase price net of cash,” Dresel said.

The initial purchase price net of cash amounted to €2.4-million.

Dresel further added that a trend in the antenna technology field is that of smart antennas.

He noted that the group’s engineers are well-positioned to drive this trend, creating products that allow functions like automatic frequency tuning, switched beam antennas and multiple port antennas. Cojot has identified some opportunities with customers that they will focus on over the period.

Dresel remarked that, “the group remains optimistic about prospects for the period ahead. By diversifying into different territories and entering new market segments, the management team’s key objective is profitable organic growth for both Alaris Antennas and Cojot.”

Both companies are strongly focused on research and development and hold exploitable patented technologies that can be monetised into the future.

Additionally, international expansion is an important part of the group’s global strategy and management will remain on the lookout for further opportunities to increase the global footprint.

Good progress has been made with an acquisition in the US and the aim is to conclude the conditions precedent as stipulated in the signed agreement in the first quarter of the new financial year.