| Tue 24 Apr 2007, 8:00 | | ALT - Allied Technologies Limited - Audited abridg |
|
ALT
ALT
ALT - Allied Technologies Limited - Audited abridged consolidated annual
financial results for the year ended 28
February 2007
Allied Technologies Limited
(Incorporated in the Republic of South Africa)
(Registration number 1946/020415/06)
ISIN: ZAE000015251
Share code: ALT
HIGHLIGHTS
Revenue up 12%
Operating income up 18%
Headline earnings per share up 10%
Dividend up 15%
Strong balance sheet
Audited abridged consolidated annual financial results for the year ended
28 February 2007
Abridged income statements
% 2007 2006
Figures in R million Change (Audited) (Audited)
Revenue 12 6 780 6 041
Operating profit before 18 573 485
impairment and capital items
Investment income 79 54
Finance costs (6) (5)
Goodwill impaired - (82)
Share of profit from - 26
associates
Capital items (Note 1) (12) 74
Profit before taxation 15 634 552
Taxation (211) (183)
Profit after taxation 15 423 369
Attributable to minority 22 5
shareholders
Attributable to ordinary 401 364
shareholders
423 369
Basic earnings per share 10 410 373
(cents)
Diluted basic earnings per 10 398 362
share (cents)
Dividend per share - paid 209 174
(cents)
Special dividend per share - 100 -
paid (cents)
Dividend per share - declared 240
(cents)
Weighted average number of 97 763 97 591
ordinary shares in issue
(millions)
Headline earnings per share 10 418 379
(cents)
Diluted headline earnings per 10 406 368
share (cents)
Notes:
1. Capital items
Loss on disposal property, plant (1) (1)
and equipment
Divisional closure cost (11) (54)
Profit on disposal of Econet - 129
Wireless Global Limited
(12) 74
2. Reconciliation between
earnings and headline earnings
Attributable to ordinary 401 364
shareholders
Capital items - gross 12 (74)
Goodwill impaired - 82
Tax effect of above adjustments (3) 4
Minority interest (1) (6)
Headline earnings 409 370
3. The Altech group`s auditors, PKF (Jhb) Inc., have audited these year-end
results. Their unqualified audit report is available for inspection at the
company`s registered office during normal office hours.
Abridged balance sheets
2007 2006
Figures in R million (Audited) (Audited)
Assets
Non-current assets 685 650
Property, plant and equipment 260 279
Goodwill 335 332
Intangible assets 30 9
Deferred taxation 60 30
Current assets 2 240 2 326
Inventories 400 290
Trade and other receivables 667 538
Cash and cash equivalents 1 173 1 498
TOTAL ASSETS 2 925 2 976
Equity and liabilities
Total equity 1 883 1 770
Shareholders` equity 1 822 1 681
Minority interest 61 89
Non-current liabilities 32 39
Minority shareholders` loan 30 30
Deferred taxation 2 9
Current liabilities 1 010 1 167
Trade and other payables 971 1 066
Warranty provisions 20 7
Taxation payable 19 94
TOTAL EQUITY AND LIABILITIES 2 925 2 976
Net asset value per share (cents) 1 863 1 721
Ordinary shares in issue at end of year 97 820 97 699
(000)
Abridged cash flow statements
2007 2006
Figures in R million (Audited) (Audited)
Operating activities (211) 414
Cash generated by operations 672 581
Investment income 73 49
Changes in working capital (327) 181
Taxation paid (324) (222)
Cash available from operating activities 94 589
Dividends paid - including minorities (305) (175)
Investing activities (116) 264
Financing activities 2 8
Net funds (utilised)/generated (325) 686
Cash and cash equivalents
- at beginning of year 1 498 812
- at end of year 1 173 1 498
Supplementary information
2007 2006
Figures in R million (Audited) (Audited)
Depreciation and impairment 90 97
Net foreign exchange gains/(losses) 4 (5)
Capital expenditure 68 142
Contingent liabilities - 27
Capital commitments - 1
Operating lease commitments
Payable within the next 12 months:
- property 32 35
- plant, equipment and vehicles 24 16
Payable thereafter:
- property 101 83
- plant, equipment and vehicles 6 1
Abridged segmental analysis
2007 2006
Figures in R million (Audited) % (Audited) %
Revenue
Telecommunications division 4 976 73 4 521 75
Multi-Media and Electronics 1 241 18 801 13
divisions
Information Technology 653 10 800 13
division
Inter group sales (90) (1) (81) (1)
6 780 100 6 041 100
Operating profit
Telecommunications division 438 76 430 89
Multi-Media and Electronics 114 20 21 4
divisions
Information Technology 25 4 40 8
division
Corporate net loss (4) - (6) (1)
573 100 485 100
Statements of changes in equity
Share
Group capital and Treasury Other
Figures in R million premium shares reserves
Balance at 1 March 2005 58 (257) -
(Audited)
Recognised income and
expense
Share-based payments
Attributable earnings
Foreign currency 1
translation differences
Transaction with
shareholders
Capital introduced
Disposal of joint
venture
Dividends
Issue of share capital 4
Balance at 28 February 62 (257) 1
2006 (Audited)
Recognised income and
expense
Share-based payments
Attributable earnings
Foreign currency 5
translation differences
Transfer between (1)
reserves
Transaction with
shareholders
Transaction with
minorities
Dividends
Issue of share capital 2
Balance at 28 February 64 (257) 5
2007 (Audited)
Transaction Share-
based
Group with payments Retained
Figures in R million minorities reserve earnings
Balance at 1 March 2005 - 1 679
(Audited)
Recognised income and
expense
Share-based payments 2
Attributable earnings 364
Foreign currency
translation differences
Transaction with
shareholders
Capital introduced
Disposal of joint
venture
Dividends (170)
Issue of share capital
Balance at 28 February - 2 1 873
2006 (Audited)
Recognised income and
expense
Share-based payments 7
Attributable earnings 401
Foreign currency
translation differences
Transfer between 1
reserves
Transaction with
shareholders
Transaction with 28
minorities
Dividends (302)
Issue of share capital
Balance at 28 February 28 9 1 973
2007 (Audited)
Share-
Group holders` Minority Total
Figures in R million equity interest equity
Balance at 1 March 2005 1 480 94 1 574
(Audited)
Recognised income and
expense
Share-based payments 2 - 2
Attributable earnings 364 5 369
Foreign currency 1 - 1
translation differences
Transaction with - -
shareholders
Capital introduced - 5 5
Disposal of joint - (10) (10)
venture
Dividends (170) (5) (175)
Issue of share capital 4 - 4
Balance at 28 February 1 681 89 1 770
2006 (Audited)
Recognised income and
expense
Share-based payments 7 - 7
Attributable earnings 401 22 423
Foreign currency 5 - 5
translation differences
Transfer between - - -
reserves
Transaction with
shareholders
Transaction with 28 (47) (19)
minorities
Dividends (302) (3) (305)
Issue of share capital 2 - 2
Balance at 28 February 1 822 61 1 883
2007 (Audited)
MESSAGE TO SHAREHOLDERS
The directors are pleased to report on the Altech group`s results for the
year ended 28 February 2007. Headline earnings per share improved by 10% to
418 cents, with revenue increasing by 12% to R6.8 billion, and operating
income by 18% to R573 million. Net asset value per share increased from 1
721 cents to 1 863 cents with cash balances of R1.2 billion reflecting the
strength of Altech`s balance sheet. Return on shareholders` equity remained
strong increasing from 22.1% to 22.7%. A dividend of 240 cents per share
was declared, representing an increase of 15%. (A special dividend of R1.00
per share was paid to shareholders during November 2006).
OPERATIONAL REVIEWS
Telecommunications and wireless communications
Altech Autopage Cellular
Altech Autopage Cellular remains the largest independent cellular services
provider in the rapidly evolving mobile market in South Africa. The company
increased its post-paid subscriber base by 90 000 during the current year,
taking its total subscriber base, including steadily growing pre-paid
numbers, to over 800 000. As expected, the increasing proportion of hybrid
connections (post-paid and pre-paid) has marginally reduced average revenue
per user. This reduction has been largely offset by rising numbers of high-
end corporate and fixed cellular customers, which remain key elements of
the business. Sales of mobile data services through add-on data packages
and cellular data modems are providing a growing stream of revenue for the
company. Equally, the strategic initiative to source handsets directly from
suppliers continues to enhance profitability and competitiveness in the
market.
Altech Autopage Cellular has significantly expanded its national footprint.
The country-wide franchise network has grown to over 150 stores,
supplemented by established third-party distribution channels, a dedicated
corporate sales force, an extensive branch network and premium service
provider, Altech Supercall.
Regulatory changes in the South African telecommunications market during
the year included the award of a second fixed-line operator licence, the
enactment of the Electronic Communications Act and the advent of mobile
number portability between cellular operators. As of February 2007, some 33
000 subscribers had been ported in the South African cellular market, which
resulted in 1 316 additional subscribers for Altech Autopage Cellular.
Mobile number portability, while in its infancy, nevertheless removes a
long-standing barrier to open competition for subscribers in the cellular
market.
With the advent of a host of affordable new technologies - from broadband,
high-speed digital portal access, wireless connectivity and ADSL - Altech
Autopage Cellular is entrenching itself as a broad-based communications
company providing unique and innovative solutions to communication users in
South Africa. Recent competitive price reductions from major operators will
benefit Altech Autopage Cellular through greater penetration and use of
wireless data services. Notably, the acquisition of the required licence to
offer value-added network services has positioned the company to continue
capitalising on growing deregulation in the telecommunications market.
Altech Netstar
Altech Netstar has continued to significantly increase its market share in
stolen vehicle tracking and recovery in Southern Africa with its affordable
and effective product range. Following the award of several sizeable
contracts during the year, the company`s fleet management business has
increased to in excess of 17 000 vehicles. Altech Netstar now manages a
subscriber base in excess of 400 000 users for stolen vehicle recovery and
fleet management services, covering assets estimated at R48 billion. The
company has recently concluded an empowerment transaction for its fleet
management business and this is detailed under the section entitled
Corporate finance activities.
In a market characterised by increasing demand, Altech Netstar is
entrenching its expertise through continuous product refinements in line
with developing technology and customer trends. In addition to ongoing
development of its own systems, a range of GSM-based products has been
developed to enhance capability and to provide new facilities to commercial
fleets and vehicles.
The Malaysian business continues to install Altech Netstar product during
the production process through its original equipment manufacturer
agreement with Malaysian car manufacturer Proton. In excess of 30 000
Proton vehicles are currently fitted with Altech Netstar vehicle tracking
units. Altech is in the process of acquiring an effective 50% joint
controlling interest in Altech Netstar`s franchisee in Malaysia, which is
detailed under the Corporate finance activities section.
International expansion through targeted markets is being actively pursued
with a number of significant investment opportunities already identified.
Altech Alcom Matomo
Altech Alcom Matomo again performed commendably. In addition to a number of
radio and telemetry projects for various customers, the company is
currently rolling out the R540-million digital terrestrial trunked radio
(Tetra) network for Gauteng South African Police Services, which is
expected to be completed during 2007. The company has recently announced an
empowerment transaction, which is detailed under the Corporate finance
activities review.
A number of major projects incorporating public-safety Tetra digital radio
systems are expected to be initiated by the South African market in the run-
up to 2010. Altech Alcom Matomo has significant engineering and project
management experience and, with Motorola, an acknowledged leader in
supplying large Tetra public-safety radio systems, is well placed to
compete for available opportunities.
Altech Alcom Radio Distributors
Altech Alcom Radio Distributors remains the leading distributor of Motorola
two-way radio products for Africa and the Middle East via a network of
authorised dealers. The company was selected as the "Motorola Top
Distributor" for Europe, Middle East and Africa for 2006. Motorola
continues to lead the market for top-quality professional, portable and
mobile radio products.
Multi-media and electronics
Altech UEC
Altech UEC develops, manufactures, services and deploys advanced set-top
box products and associated software. The company produced excellent
results for the year, benefiting from its sales of the pioneering dual-view
personal video recorder (PVR), developed and supplied by Altech UEC. In
addition, initiatives to reduce operating costs contributed to the
improvement of margins for the longer term. However, significant investment
in research and development continued, with spend almost doubling in the
current year. In its inaugural year, the PVR ground-breaking technology has
generated orders from MultiChoice and pay-TV operators in Israel, Brazil,
Mexico and Dubai.
Altech UEC Global Decoder Logistics, the after-sales service business with
support and logistics operations in Australia and South Africa, performed
well, increasing both its revenue and profitability.
Delivery has started on the three-year order signed with Australian
operator, Austar, for the initial supply of 100 000 decoders.
The deployment of satellite television services in India has significantly
increased demand for pay-television products across that country. Through
its robust technology, ability to bring products to market quickly and
established presence in India, Altech UEC is well positioned to exploit the
rapid growth this region is experiencing.
Altech Arrow Altech Distribution
Altech Arrow Altech Distribution reported record results for the year with
unit sales up 48%, driven by its focus on value-added services. A strong
order book mirrors increased customer activity across all markets, from pre-
paid utility meters to domestic and automotive security systems, vehicle
tracking and fleet management products and electronic contract
manufacturing services.
Information technology
Altech Isis Information Systems
Altech Isis recorded excellent results for the year, entrenching its
position as the foremost supplier of end-to-end operational support systems
solutions in South Africa and Africa.
The acquisition of MobiMaster, since renamed Altech Isis France, has
enabled Altech Isis to provide a more comprehensive and global offering to
telecommunications network operators and other clients. The acquisition
also provides Altech Isis access to MobiMaster clients in new regions, and
adds a billing system offering for pre- and post-paid, voice and data, and
content services.
Altech Card Solutions
Altech Card Solutions performed in line with expectations during the year,
with excellent growth in its plastic card and personalisation equipment
units. In South Africa, bank relationships remained strong with this
company`s products and services operating in most major banks. Its
switching division recorded significant progress following the launch of a
card-based gift voucher programme. Opportunities in targeted markets in
Africa are increasing as electronic banking gains momentum.
Altech Cardtronic
Altech Cardtronic recorded satisfactory results for the year. The benefit
of the recapitalisation project in the prior year has positioned the
business unit to compete more effectively in a market showing significant
demand for non-secure cards and personalisation services.
Altech NamITech
Altech NamITech, through its operations in Nigeria and South Africa, is the
leading manufacturer of cellular SIM cards, pre-paid vouchers, and magnetic
stripe and EMV (Europay/Mastercard/Visa) bank cards in Africa.
The full benefits of the re-engineering and cost-reduction exercise
initiated in February 2006 in the South African operations are expected to
result in its return to profitability in the current financial year.
The company will continue to focus on smart card-based solutions, pre-paid
card and voucher distribution, electronic voucher distribution and other
secure solutions to ensure its future growth. At present, opportunities
valued at over R2 billion are being pursued.
Altech NamITech`s pre-paid cellular voucher manufacturing facility in
Lagos, Nigeria, has proved extremely successful, achieving profitability in
its first full year of operation. This facility has positioned itself as
the leader in this market, supplying over 50 million vouchers per month to
five major operators in Nigeria.
Corporate finance activities
Altech is making excellent progress in formalising relationships that
underpin the key elements of its strategy, namely capitalising on
convergence and global expansion. Salient transactions include:
the introduction of an empowerment shareholder to Altech Netstar for its
fleet management business. Nariku (Pty) Limited, headed by Dr Enos Banda, a
non-executive director of Altech, will effectively hold a 25% interest in
Altech Netstar Fleet Management Services (Pty) Limited, further
strengthening Altech Netstar`s competitive advantage in tendering for large
fleet management contracts
securing a new empowerment partner for Altech Alcom Matomo. Following the
purchase of Motoma ICT Group`s 30% interest in Altech Alcom Matomo, a new
empowerment shareholding was finalised through Platina Venture Holdings
(Pty) Limited, headed by Dr Penuell Maduna, a non-executive director of
Altech`s listed holding company, Altron. This strengthens Altech Alcom
Matomo`s position in the growing telecommunications sector
the acquisition of an effective 10.8% share in Altech NamITech held by
German smart-card company, Giesecke & Devrient (G&D). A close commercial
relationship with G&D will be maintained and Altech NamITech will continue
to represent G&D`s products and services in sub-Saharan Africa for up to
two years while exploring a number of new technologies. Empowerment group
Pamodzi remains a 28% shareholder in Altech NamITech
the finalisation of the Euro1,5 million acquisition of the MobiMaster
division of Linedata Services, France in September 2006. The integration of
this software support business into Altech Isis further expands its
offering to telecommunications network operators and other clients
the acquisition of exclusive technology and distribution rights for sub-
Saharan Africa from USA - based CityNet Wireless Inc. and its global
licensing partner CityNet Wireless International (Pty) Limited. These
rights will enable Altech to enter the broadband communication
infrastructure and operator arena in sub-Saharan Africa, using proven and
cost-effective leading WiFi mesh network technology currently operating in
over 40 cities worldwide
Altech formed a partnership with Samsung Electronics, Korea, for a trial
of WiMax 802.16e network, in South Africa after a successful test licence
application to the national communications authority, ICASA., WiMax
802.16e, in which cell-cell handover forms part of the core architecture,
is widely expected to emerge as the dominant wireless IP delivery
technology for the next 10 years
the conclusion of a binding heads of agreement relating to the proposed
acquisition by Altech of a 50% joint controlling interest in a new company
which will hold 60% of Netstar Advanced Systems Sdn.Bhd. (Netstar Malaysia)
currently Altech Netstar`s franchisee in Malaysia. The remaining 40% of
Netstar Malaysia is held by Malaysia`s leading vehicle manufacturer, Proton
Edar Sdn. Bhd. Certain conditions precedent to this transaction, including
the completion of an independent valuation process (which is currently
underway), remain to be fulfilled.
OUTLOOK
We believe real growth in the coming year will be achieved through:
increased orders at both Altech UEC and Altech Alcom Matomo
growing annuity revenue at Altech Autopage Cellular and Altech Netstar
the successful completion of turnaround initiatives at Altech NamITech`s
South African operations
Altech`s ability to capitalise on future data growth (broadband) and
related opportunities
Altech`s increasing presence in high growth emerging markets worldwide
carefully considered acquisition opportunities in line with its strategic
focus.
In combination, these augur well for Altech`s performance in the new
financial year.
DIRECTORATE
There were no changes to Altech`s directorate during the year.
DECLARATION OF ORDINARY DIVIDEND NO 64
Ordinary dividend number 64 of 240 cents per share (2006: 209 cents) for
the year ended 28 February 2007 is declared payable on Monday, 4 June 2007
to ordinary shareholders recorded in the register at the close of business
on Friday, 1 June 2007. The timetable for the payment of the dividend is as
follows:
Last day to trade cum dividend Friday, 25 May 2007
Trading ex dividend commences Monday, 28 May 2007
Record date Friday, 1 June 2007
Payment date Monday, 4 June 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 28 May 2007 and Friday, 1 June 2007, both days inclusive. The
certificated register will be closed for this period.
ANNUAL GENERAL MEETING
The company`s 61st annual general meeting will be held in the Boardroom,
Altech Corporate Offices, 79 Central Street, Houghton on Thursday, 12 July
2007 at 15:00. Further details on the company`s annual general meeting will
be included in Altech`s annual report to be posted to shareholders on or
about 31 May 2007.
On behalf of the board
Dr Hilton Davies Craig Venter Dr John Carstens
(Non-executive (Chief executive (Chief financial
chairman) officer) officer)
24 April 2007
Directors
Dr HK Davies (chairman)#, CG Venter (chief executive officer), Dr EN
Banda#, Dr JEW Carstens (chief financial officer), PMO Curle*, ML Leoka#, R
Naidoo#, DC Radley#, Dr HA Serebro#, RE Venter#, Dr WP Venter#, PL Wilmot#
* British # Non-executive
Secretaries
Altech Management Services (Pty) Limited
Sponsor
Investec Bank Limited
Altech
Registration number: 1946/020415/06
ISIN: ZAE000015251
Share code: ALT
The annual financial results are also available on the internet at
www.altech.co.za
Date: 24/04/2007 08:00:02 Produced by the JSE SENS Department.
