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Altron seeks to invest cash pile
Wednesday, 23 May 2012 00:00
Written by Nicola Mawson
The JSE-listed diversified group is looking for acquisition opportunities in which to invest some of its R1.1 billion war chest.
The company recently reported its annual results for the 12 months to February, and said revenue gained 3%, to R23.6 billion, but earnings before interest, tax, depreciation and amortisation dropped 7%, to R1.9 billion. Total comprehensive income for the year was R16 million, compared with R394 million in 2011.
Altron ended the year with a cash balance of R1.1 billion, compared with R1.4 billion a year ago. CEO Robert Venter says part of this cash pile will be used to pay out dividends, while some will be used for acquisitions.
Altron declared a 92c an ordinary share dividend compared with 108c a year ago. The same amount was declared for holders of preference shares. Venter adds the company also has a conservative balance sheet, which allows it to move quickly when it invests in acquisitions or capital expansion.
Robert Venter explains that, over the past few years, Altron has been selective in acquisitions and has been focused internally as it sought to improve its cost base. He says Altron is an acquisitive group and now needs to leverage its cost base by growing revenue.
Altech, Alton’s 62%-held subsidiary, and Bytes Technology, will be the main drivers of purchases, says Robert Venter. He adds that Powertech may buy a company if the opportunity is right.
Altech CEO Craig Venter says Netstar is close to buying out a company in Latin America, which will give it access to growth markets such as Argentina, Brazil, Colombia and Mexico. In September 2010, Altech was close to signing a deal, but walked away.
Should the acquisition go through, Netstar will be the largest vehicle tracking company in the world, Craig Venter adds. Altech has been looking for an acquisition, but has binned two deals over concerns that came up during due diligence.
During the year, Altech bought Eyenza Mobile Money, an e-wallet-based payments system, and SetOne, a Germany-based supplier of digital video broadcasting-based products and solutions.
Bytes will continue to look at acquisitions that will complement its current offerings, says Robert Venter.
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