Wrap Text
Audited consolidated results for the year ended 28 February 2025 and cash dividend declaration
ALTRON LIMITED
Registration number 1947/024583/06
(Incorporated in the Republic of South Africa)
Share code: AEL
ISIN: ZAE000191342
("Altron" or "Group" or "the Company")
AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2025 AND
CASH DIVIDEND DECLARATION
SALIENT FEATURES – CONTINUING(1) OPERATIONS
- Strong growth in profitability, primarily driven by the Platforms
segment.
- R9.6 billion revenue, flat compared to last year, impacted by the
sale of the ATM Business(2). Excluding the ATM Business(2), revenue
grew 3%.
- R1.8 billion earnings before interest, tax, depreciation and
amortisation ("EBITDA"), up 27%.
- R972 million operating profit, up 50%.
- 178 cents headline earnings per share ("HEPS"), up 73%.
- 156 cents earnings per share ("EPS"), up 64%.
CONTINUING(1) REPORTED
Previously
published Restated %
R million FY25 FY24 FY24(3) change(3)
Revenue 9 588 8 250 9 603 0%
EBITDA(4) 1 822 1 502 1 436 +27%
Operating profit(4) 972 739 650 +50%
Net profit after tax 616 433 387 +59%
HEPS 178 cents 116 cents 103 cents +73%
EPS 156 cents 108 cents 95 cents +64%
Notes
- Continuing operations include Netstar, Altron FinTech, Altron
HealthTech, Altron Digital Business, Altron Security, Altron
Document Solutions, Altron Arrow and excludes Altron Nexus.
- The ATM Business of Altron Managed Solutions was sold effective 1
July 2023, with four months trading included in the comparative
results.
- Altron Document Solutions was previously reported as part of
discontinued operations. For FY25 Altron Document Solutions is
reported as a continuing operation. The FY24 period was restated
for the classification of Altron Document Solutions as a continuing
operation. The % changes have been calculated using the restated
results.
- Capital Items excluded from EBITDA and operating profit, comprise
loss and costs on disposals, impairments, capital rental devices
written off, and lease modifications and terminations where
applicable.
All growth rates quoted are year-on-year and refer to the year ended
28 February 2025 compared to the restated year ended 29 February 2024,
unless stated otherwise.
SALIENT FEATURES – GROUP
- R9.9 billion revenue, down 4%, primarily due to the sale of the ATM
Business(2) and a decrease in revenue at Altron Nexus after its
restructuring. Excluding the ATM Business(2), revenue reduced by
1%.
- R1.7 billion EBITDA, up 69%.
- R817 million operating profit, up over 100%.
- R993 million net cash and cash equivalents, up 58%.
- 134 cents HEPS, up over 100%.
- 103 cents EPS, up over 100%.
- 50 cents per share final dividend, up 52%.
GROUP (including discontinued operations)
Previously
published Restated %
R million FY25 FY24 FY24(3) change(3)
Revenue 9 931 10 325 10 325 (4%)
EBITDA(4) 1 667 985 985 +69%
Operating profit(4) 817 210 187 >100%
Net profit after tax 415 (141) (147) >100%
HEPS 134 cents (25) cents (29) cents >100%
EPS 103 cents (43) cents (45) cents >100%
Final dividend 50 cents 33 cents 33 cents +52%
KEY BUSINESS HIGHLIGHTS
- Altron, South Africa's original technology company, celebrated 60
years of solving real-world problems for its clients.
- The Group was awarded 4th place in the Sunday Times Top 100
companies and certified top employer in South Africa by the Top
Employers Institute.
- Netstar delivered another robust performance, growing EBITDA by 17%
to R935 million. Total subscribers grew 16% and exceeded 2 million
subscribers, supported by double-digit growth in both the consumer
and enterprise segments.
- Altron FinTech delivered strong profitability growth, with EBITDA
up 38% to R457 million, driven primarily by strong growth in the
SME customer base and increased volume and value of debit orders
processed through its collection and payment platform.
- Within IT Services, Altron Document Solutions was reclassified as
a continuing operation following a review of strategic options.
Whilst still in the process of executing a profit improvement
strategy, Altron Document Solutions delivered EBITDA of R84 million
compared to an EBITDA loss of R74 million last year, which included
provisions raised of R95 million.
- R645 million growth capital expenditure was invested, focused
on Netstar, Altron FinTech and systems and platforms.
Commenting on the results, CEO Werner Kapp said, "This year's strong
results reflect the disciplined execution of our strategy, despite
heightened economic and political uncertainty. Our high annuity
revenue base provides a solid foundation, with our Platforms segment
remaining a key growth driver, delivering double-digit revenue and
profit growth. This consistent performance has strengthened our
financial position and enabled us to deliver meaningful value
to our shareholders."
DETAILED FINANCIAL OVERVIEW
Altron delivered a solid financial performance for the year, with
continued execution of its strategy and a focus on higher-margin,
quality revenue supporting improved profitability.
Revenue from continuing operations was flat at R9.6 billion, impacted
by the sale of the ATM Business(2). Excluding the ATM Business(2),
revenue grew 3% with strong annuity revenue growth of 10%. A focus on
the quality of revenue growth, lifted gross margin by 2 percentage
points to 40%. Operating leverage supported a 27% increase in EBITDA
to R1.8 billion and a 50% increase in operating profit to R972 million.
The Platforms segment, where the Group has allocated capital to
support strategic growth, underpinned this performance, delivering a
12% increase in revenue, a 23% increase in EBITDA and a 30% increase
in operating profit. HEPS increased to 178 cents from 103 cents, with
EPS at 156 cents, up from 95 cents last year.
Group revenue declined 4%, impacted by the sale of the ATM Business(2)
and reduced revenue from Altron Nexus following its restructuring.
Group EBITDA increased 69% to R1.7 billion and operating profit more
than tripled to R817 million. Subsequent to year-end, the Group
entered into a sale and purchase agreement with a consortium that
includes members of Altron Nexus' management team for the sale of
Altron Nexus (the "MBO Transaction"), the Group's remaining
discontinued operation. The MBO Transaction is subject to the
fulfilment of conditions precedent, which are targeted to be fulfilled
by 30 June 2025.
The Group remains highly cash-generative and well-capitalised, growing
net cash and cash equivalents 58% to R993 million, providing a strong
foundation for executing its immediate and medium-term strategic
initiatives.
Segmental overview
In line with Altron's strategy to become the leading platform and IT
services business in its chosen markets, from 1 March 2024 the Group
reorganised into the following operating segments:
- Platforms: Netstar, Altron FinTech and Altron HealthTech.
- IT Services: Altron Digital Business, Altron Security and Altron
Document Solutions.
- Distribution: Altron Arrow.
- Other: Consolidation and other international operations.
CONTINUING(1) REPORTED
Restated
R million FY25 FY24(3) % change(3)
REVENUE
Platforms 3 956 3 547 +12%
IT Services 5 055 5 404 (6%)
Distribution 669 802 (17%)
Other (92) (150) +39%
EBITDA(4)
Platforms 1 514 1 233 +23%
IT Services 307 220 +40%
Distribution 69 69 0%
Other (68) (86) +21%
OPERATING PROFIT(4)
Platforms 798 613 +30%
IT Services 230 131 +76%
Distribution 67 67 0%
Other (123) (161) +24%
Platforms
The Platforms segment grew revenue by 12% to R4 billion, with EBITDA
growing 23% to R1.5 billion and operating profit increasing 30% to
R798 million.
- Netstar revenue grew 10% to R2.3 billion, supported by a higher
annuity contribution, which accounted for 91% of total revenue.
EBITDA increased 17% to R935 million, with a 3 percentage point
expansion in EBITDA margin and operating profit increased 15% to
R255 million.
- Netstar expanded its market share in FY25, underpinned by
growth in strategic partnerships, within the insurance and
dealerships segments and expanding within OEMs, to strengthen
its distribution network.
- The total subscriber base grew 16% to over 2 million
subscribers, with connected devices up 4% to 2.4 million. 495
075 gross subscribers were added, with 272 574 net subscriber
additions. Consumer subscribers grew 10%, with higher margin
enterprise customers growing 13%. A strong performance in
South Africa, with 12% revenue growth, was offset by softer
market conditions in Australia, where the 3G to 4G migration
resulted in a R16 million loss for the Australian operations,
compared to a R24 million profit in FY24.
- Churn increased from 16% to 19%, due to higher churn in the
Australian business, however churn in SA remained at targeted
levels.
- Operational efficiencies were improved through Netstar's
expanded network of fitment centre partnerships, which
assisted in maintaining its contract fulfilment rate above
90%. A continued focus on the conversion of pre-fitments,
ensured Netstar's conversion ratio was maintained above the
targeted 60%, with the benefits of the higher conversion rate
supporting growth in operating profit.
- Netstar's global fleet bureau scaled to over 33 000 managed
assets, supporting growth in data-driven managed services
revenue.
- Altron FinTech continued its positive momentum, growing revenue
17% to R1.3 billion, with annuity revenue increasing from 74% to
84%. EBITDA increased 38% to R457 million, expanding its EBITDA
margin 6 percentage points to 36%. Operating profit grew 46% to
R423 million. Growth was primarily driven by the collection and
payment platform, which delivered strong results, following a
focused SME sales initiative. This performance reflects the
effectiveness of Altron FinTech's proprietary platforms, which
enable rapid onboarding of merchants of all sizes across both
formal and informal markets. With interoperability across
multiple payment systems and wallets, and the use of data to
enhance credit assessments and customer insights, the platform
continues to build trust, support adoption, and expand product
penetration, particularly within the microfinance sector serving
underserved communities.
- Altron HealthTech increased revenue 6% to R397 million,
supported by higher corporate switching and private practice
licence fees. EBITDA increased 15% to R122 million, with
operating profit up 18% to R120 million. The private practice
segment added 862 net new practices, reflecting a 1.6x
acquisition-to-churn ratio and contributing 3% revenue growth.
The corporate segment added 22 new logos, growing revenue by
17%. Momentum continues in expanding data-driven services, with
the oncology solution adding 22 new practices.
IT Services
The IT Services segment generated revenue of R5.1 billion, down 6%,
primarily due to the sale of the ATM Business(2). Excluding the ATM
Business(2), IT Services reported flat revenue growth. EBITDA improved
40% to R307 million and operating profit increased to R230 million,
up from R131 million. Prior year performance was negatively impacted
by a R95 million provision raised in Altron Document Solutions.
- Altron Digital Business, adjusted for the sale of the ATM
Business(2), maintained flat year-to-date revenue of R3.2
billion, impacted by the delay of two projects into FY2026. In
line with guidance, EBITDA and operating profit were weaker than
the prior period, with EBITDA decreasing 44% to R109 million and
operating profit reducing 47% to R83 million. This was due to
reduced spending by two large customers in the first half of the
year and non-recurring project expenses relating to historic
contracts.
- Despite a disappointing performance, Altron Digital Business
made solid progress in integrating Altron Systems Integration,
Altron Karabina, and Altron Managed Solutions. One year into the
integration process, the business has rebuilt its sales
leadership, strengthened its cloud and security capabilities,
and expanded its partner ecosystem, positioning it to benefit
from deferred IT spend amid heightened uncertainty and delayed
capex from South Africa's top corporates.
- Altron Security reported revenue of R397 million, down 12% from
R449 million, impacted by capital constraints at a large customer
and a shift in revenue mix between agency and principal revenue.
Growing higher margin managed services and disciplined cost
management resulted in EBITDA increasing 13% to R114 million and
operating profit increasing 19% to R86 million.
- Altron Document Solutions was reclassified to continuing operations
during the period, following a review of strategic alternatives.
The business is executing on its profit improvement strategy, which
is focused on enhancing the quality of revenue, growing annuity
income, and maintaining strict cost discipline. Revenue increased
by 1% to R1.4 billion. EBITDA improved to R84 million from a prior-
year loss of R74 million, with operating profit improving to R61
million, compared to a loss of R97 million in the prior year. FY24
included provisions of R95 million.
Distribution
As previously guided, the electronics component distribution industry
entered a global cyclical downturn, with inventory levels normalising
to pre-COVID levels, impacting Altron Arrow's financial performance.
Revenue declined 17% to R669 million. However, disciplined cost
management resulted in EBITDA and operating profit remaining flat at
R69 million and R67 million, respectively. Despite the slowdown,
Altron Arrow increased market share by 4% (per Arei), supported by
its continued focus on customer engagement and innovative technology
solutions.
Discontinued operations
Altron Nexus reported revenue of R343 million, compared to R659
million in the prior year. EBITDA improved to a loss of R149 million
from a loss of R421 million, and the operating loss improved to a loss
of R148 million from a loss of R433 million. The net asset value of
Altron Nexus reflected in the Group's financial statements was R146
million, after the elimination of intercompany loans on consolidation.
Under the terms of the MBO Transaction, the acquirers of Altron Nexus
will assume all company-related debt, excluding any obligations that
are specifically excluded. Any potential recoveries from the City of
Tshwane legal process will remain with Altron. Other than the
repayment of intercompany loans, the MBO Transaction is not expected
to generate any disposal proceeds for the Group. The MBO Transaction
remains subject to the fulfilment of conditions precedent, which are
targeted to be fulfilled by 30 June 2025.
Capital structure and Group working capital
The Group continued to generate strong operating cash flows, which
increased by 7% to R1.7 billion, reflecting improved profitability
and disciplined working capital management. Net cash and cash
equivalents improved 58% to R993 million as at 28 February 2025,
further strengthening the Group's balance sheet, enhancing its
capacity to fund strategic initiatives.
Working capital decreased by R46 million to R1.4 billion and is
considered at an optimal level to support operations, with future
movements targeted to reflect growth in the underlying businesses.
The Group invested R708 million in capital expenditure, of which R645
million supported growth initiatives. This includes R442 million
investment in Netstar's capital rental devices and R31 million in
Altron FinTech's capital rental devices. Capital expenditure was
financed out of operating cashflows and Group net debt at year end
was R113 million, down from R313 million in the prior year.
FINAL DIVIDEND
The Board approved a 52% increase in the final dividend to 50 cents
per share (40.00 cents net of 20% dividend withholding tax) for the
year ended 28 February 2025. This dividend will be payable to
shareholders registered with the Company as of the close of business
on the record date listed below.
The Board confirmed that the solvency and liquidity test as
contemplated by the Companies Act, No. 71 of 2008, as amended, has
been duly considered, applied, and satisfied. This is a dividend as
defined in the Income Tax Act, No. 58 of 1962 and is payable from
income reserves. The income tax number of the Company is 9725149711.
The number of ordinary shares in issue at the date of this declaration
is 412 055 395 including 30 837 778 treasury shares.
The key dates related to the final dividend are as follows:
DIVIDEND DATES 2025
Last day to trade cum dividend Tuesday, 10 June
Commence trading ex-dividend Wednesday, 11 June
Record date Friday, 13 June
Final dividend payment date Tuesday, 17 June
Share certificates may not be dematerialised or re-materialised
between Wednesday, 11 June 2025 and Friday, 13 June 2025, both days
inclusive.
OUTLOOK
Altron remains committed to the disciplined execution of its strategy,
which is underpinned by a strong annuity revenue base, a robust balance
sheet, and exposure to structurally attractive, high-growth markets.
Over the past two years, the Group has delivered consistent, high
double-digit growth in profitability from continuing operations,
supported by sustainable operational improvements.
While the strategy and core fundamentals remain sound, the operating
environment is expected to remain constrained, with heightened
economic uncertainty and market volatility continuing to impact
customer spending patterns, particularly in the IT Services segment,
which may impact Altron's growth into FY26.
Against this backdrop, the Group remains focused on executing its
strategy, prioritising capital allocation into platform businesses,
and investing for long-term value creation. Altron remains committed
to its medium-term (3–5 year) operating profit margin targets of
+19% in the Platforms segment and +7% in the IT Services segment,
as well as its dividend policy of paying out at least 50% of HEPS from
continuing operations.
The information in the Group outlook section has not been reviewed or
reported on by the Group's auditors.
RESULTS PRESENTATION
An investor presentation will be hosted at 9:30am CAT on 26 May 2025
to present the Group's financial results for the year ended 28
February 2025. A webcast of the presentation can be accessed via
the following link: click here
(https://78449.themediaframe.com/links/altron250526.html)
SHORT FORM ANNOUNCEMENT
This short-form announcement contains only a summary of the
information in the full annual financial statements ("AFS") and does
not contain full or complete details. The AFS can be found on the
JSE cloudlink at:
https://senspdf.jse.co.za/documents/2025/jse/isse/aele/FY25.pdf
Any investment decisions by investors and/or shareholders should be
based on consideration of the AFS as a whole.
The AFS have been audited by the Company's auditors,
PricewaterhouseCoopers Inc. ("PwC"), who expressed an unmodified audit
opinion thereon. The auditor's report is available, along with the
AFS, on the Company's website at www.altron.com.
FURTHER INFORMATION
This short-form announcement is the responsibility of the directors
and contains forward-looking statements that relate to Altron's future
operations and performance. Such statements have not been reviewed or
reported on by the Company's external auditors and are not intended
to be interpreted as guarantees of future performance, achievements,
financial or other results. They rely on future circumstances, some
of which are beyond management's control, and the outcomes implied by
these statements could potentially be materially different from future
results. No assurance can be given that forward-looking statements
will be accurate; thus, undue reliance should not be placed on such
statements.
For and on behalf of the Board.
Mr. S van Graan Mr. W Kapp Mr. C Snyman
Chairman Group Chief Executive Chief Financial Officer
Registered Office
Altron Campus, 20 Woodlands Drive, Woodlands Office Park, Woodmead,
Gauteng, South Africa, 2191
JSE Equity Sponsor
Investec Bank Limited
Transfer Secretaries
Computershare Investor Services Proprietary Limited, 1st Floor,
Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196
Directors
Mr. SW van Graan (Chairman)#, Mr. WG Kapp (Group Chief Executive)*,
Mr. C Snyman (Chief Financial Officer)*, Mr. GG Gelink#, Dr. P
Mnganga#, Ms. S Rapeti#, Ms. AK Sithebe#, Mr. G Kouteris#, Mr. TR
Ngara**, Mr. A Ball**, Mr. BW Dawson**.
* Executive Director
** Non-Executive Director
# Independent Non-Executive Director
Group Company Secretary
Ms M Ngcobo
26 May 2025
Date: 26-05-2025 07:15:00
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