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ATN / ATNP - Allied Electronics Corporation - Abridged audited consolidated
financial statements for the year ended 29 February 2008
ALLIED ELECTRONICS CORPORATION LIMITED
(Registration number: 1947/024583/06)
(Incorporated in the Republic of South Africa)
Share code: ATN ISIN: ZAE000029658
Share code: ATNP ISIN: ZAE000029666
Abridged audited consolidated financial statements for the year ended 29
February 2008
HIGHLIGHTS
- Revenue up 25%
- Operating profit up 27%
- Headline earnings per share up 33%
- Dividend up 32%
- Cash on hand R2.1 billion
Abridged income statement
% 2008 2007
R millions change (Audited) (Audited)
Revenue 25 21 431 17 126
Operating profit before capital items 27 1 937 1 528
Capital items (Note 1) (90) (38)
Result from operating activities 1 847 1 490
Finance income 182 132
Finance expense (89) (56)
Share of profit from associates 4 4
Profit before taxation 1 944 1 570
Taxation (625) (481)
Profit for the year 21 1 319 1 089
Attributable to minority interest 300 284
Attributable to Altron equity holders 1 019 805
Basic earnings per share (cents) 24 357 287
Diluted basic earnings per share 24 310 250
(cents)
Dividends per share paid (cents) 118 78
Dividends per share declared (cents) 156 118
Notes
Basis of preparation
The abridged consolidated financial statements have been prepared in accordance
with the recognition and measurement criteria of International Financial
Reporting Standards (IFRS) and its interpretations adopted by the International
Accounting Standards Board (IASB) in issue and effective at 29 February 2008,
the disclosure requirements of IAS34, Interim Financial Reporting and in
compliance with the Listings Requirements of the JSE Limited.
The accounting policies followed are consistent with those used in the prior
year.
Auditors` report
KPMG Inc`s unmodified auditors` report included in the consolidated annual
financial statements and on the abridged consolidated financial statements
contained in this abridged report are available for inspection at the company`s
registered office.
% 2008 2007
R millions change (Audited) (Audited)
Headline earnings per share (cents) 33 375 283*
Adjusted headline earnings per share 36 387 286
(cents)
Diluted headline earnings per share 33 327 247*
(cents)
* Restated in accordance with Circular 08/2007 - Headline Earnings.
1. Capital items
Net gain on disposal of property, plant 2 33
and equipment
Impairment charges (86) (61)
Goodwill adjustment on 2 (19)
reversal/(utilisation) of at
acquisition tax losses
Net (loss)/gain on disposal of (1) 9
businesses and investments
Foreign currency translation reserve (7) -
released on disposal
(90) (38)
2. Reconciliation between attributable
earnings and headline earnings
Attributable to Altron equity holders 1 019 805
Capital items - gross 90 38
Tax effect of capital items - (5)
Deferred tax assets reversed/(raised) 2 (16)
on at acquisition tax losses
Minority interest in capital items (39) (29)
Headline earnings 1 072 793
The determination of headline earnings for the year ended 28 February 2007 has
been restated following the issue of Circular 08/2007 on Headline Earnings. In
terms of this Circular, the income statement impact of the deferred taxation
assets subsequently raised on tax losses not previously recognised in business
combinations has now been excluded from headline earnings in accordance with the
new circular.
2008 2007
R millions (Audited) (Audited)
3. Reconciliation between attributable
earnings and diluted earnings
Attributable to Altron equity holders 1 019 805
Additional earnings attributable to (118) (87)
BBBEE minorities in subsidiaries
Minority interest in adjustments 7 20
Additional earnings attributable to (14) (21)
dilutive options at subsidiary level
Diluted earnings 894 717
4. Reconciliation between headline
earnings and diluted headline earnings
Headline earnings 1 072 793
Additional earnings attributable to (118) (82)
BBBEE minorities in subsidiaries
Minority interest in adjustments 8 24
Additional earnings attributable to (17) (26)
dilutive options at subsidiary level
Diluted headline earnings 945 709
5. Reconciliation between headline earnings and adjusted
headline earnings
Adjusted headline earnings have been presented to demonstrate the impact of some
once off events and accounting charges on the headline earnings of the group.
Headline earnings are reconciled to adjusted headline earnings as follows:
Headline earnings 1 072 793
Amortisation of intangibles 40 19
IFRS 2 charge on BBBEE transactions 3 -
Expenses associated with proposed 13 -
purchase of minorities in subsidiaries
Tax effect of adjustments (14) (5)
Minority interest in adjustments (8) (6)
1 106 801
Fully diluted earnings and diluted headline earnings have been calculated in
accordance with IAS 33 - Earnings per share on the basis that:
- Kagiso Strategic Investments (Pty) Limited exercised its full option on 22%
of the shares in Bytes Technology Group South Africa (Pty) Limited adjusted for
the dilutive effect of the option price at the Bytes Technology Group SA level.
- The recognition of the deferred sale of a 30% interest to the Izingwe
Consortium in Aberdare Cables based on the assumption that the purchase price of
R160 million (comprising the empowerment funding obligation net of excess cash
deposits of R12 million) is settled, adjusted for the dilutive effect of the
option price at the Aberdare level and after taking into account the 10%
investment in the Izingwe Consortium by Power Technologies (Pty) Limited.
- The earnings effect of dilutive options at Allied Technologies Limited level.
6. Acquisitions of subsidiaries
IST
With effect from 3 September 2007, Powertech acquired 100% of IST for a cash
consideration of R504 million. IST is a technology and solutions driven business
that offers engineering solutions to its customers in the power utilities,
telecoms, mining and material processing industries.
For the year ended 29 February 2008,IST contributed R248 million to revenue and
a loss after tax of R20 million due to the amortisation of intangibles and the
gearing introduced. If the acquisition had taken place on 1 March 2007, IST
would have contributed revenue of R454 million and a loss after tax of R39
million for the year to 29 February 2008. This has been calculated using the
group`s accounting policies and after adjusting for the interest cost associated
with the borrowings introduced as well as the amortisation charges, net of tax,
assuming that the fair value adjustments and gearing had taken place on 1 March
2007.
The acquisition had the following effect on the group`s assets and liabilities:
Carrying Fair value Recognised
amount adjustments values
Non-current assets 64 133 197
Current assets 124 - 124
Non-current liabilities (93) (39) (132)
Current liabilities (133) - (133)
Net identifiable assets and (38) 94 56
liabilities
Goodwill on acquisition 448
Total consideration 504
Less cash balances acquired (6)
Consideration paid in cash 498
The quantum of goodwill arising on this acquisition is high as a result of much
of the value of the business residing in the quality of the workforce, which is
not recognisable as an intangible asset.
Other acquisitions
During the year under review, the group also concluded the following
acquisitions:
- a 50% interest in East Rand Document Solutions for R6 million with effect
from 1 March 2007
- 100% of Mastermed for R10 million with effect from 1 March 2007
- 100% of Swanib Cables for R43 million with effect from 1 March 2007
- 100% of the Mailing Facilities operation for R8 million with effect from 1
June 2007
- 100% of the Netstar Franchise in Rustenburg for R11 million with effect from
1 August 2007
- 100% of the Papergeni operation for R5 million with effect from 1 December
2007
- 100% of Comtech for R53 million with effect from 1 January 2008.
For the year ended 29 February 2008, these acquisitions contributed R207 million
to revenue and R18 million to the consolidated profit after tax. If the
acquisitions had taken place on 1 March 2007, the acquired businesses would have
contributed revenue of R298 million and profit after tax of R17 million for the
year to 29 February 2008. This has been calculated using the group`s accounting
policies and after adjusting for amortisation charges, net of taxation, assuming
that the fair value adjustments had taken place on 1 March 2007.
The above acquisitions had the following effect on the group`s assets and
liabilities:
Carrying Fair value Recognised
amount adjustments values
Non-current assets 13 64 77
Current assets 74 - 74
Non-current liabilities - (15) (15)
Current liabilities (58) - (58)
Net identifiable assets and 29 49 78
liabilities
Goodwill on acquisition 58
Total consideration 136
Less deferred purchase (9)
consideration
Less cash balances acquired (6)
Consideration paid in cash 121
7. Post balance sheet acquisitions
Acquisition of 51% controlling interest in certain East African companies
With effect from 1 March 2008 Altech acquired a 51% controlling interest in the
following entities that are involved in the provision of broadband services in
Kenya, Uganda and Tanzania:
- Kenya Data Networks Limited for US$68 million
- Swift Global (Kenya) Limited for US$5 million
- Infocom Limited for US$2 million.
Of the total purchase price of US$75 million, an amount of US$10 million is held
in escrow as a deferred purchase consideration, dependent on the achievement of
a combined profit after tax of at least US$11.7 million for the year ending 31
December 2008. This amount will be reduced proportionately in respect of any
shortfall on the warranted profit after tax.
Following the transaction, the shareholders injected a further US$20 million
into the three companies in proportion to their shareholdings. As a result,
Altech has injected a further US$10.2 million to fund the expansion of the
business.
The acquirees` combined balance sheet at the date of acquisition is as follows:
Carrying
amount
Non-current assets 261
Current assets 119
Non-current liabilities -
Current liabilities (124)
Net identifiable assets and liabilities 256
Acquisition of the 50% of ABB Powertech Transformers not already owned
With effect from 1 April 2008, Powertech acquired the remaining 50% of ABB
Powertech Transformers (Pty) Limited that it did not already own for R320
million.
The 50% of the balance sheet acquired is as follows:
Carrying
amount
Non-current assets 42
Current assets 190
Non-current liabilities (1)
Current liabilities (90)
Net identifiable assets and liabilities 141
The purchase price allocations for each of these acquisitions will be performed
during the 2009 financial year, which will identify the fair value of all assets
and liabilities and any recognisable intangible assets with the resulting
balance being recorded as goodwill.
Abridged balance sheet
2008 2007
R millions (Audited) (Audited)
Assets
Non-current assets 3 362 2 311
Property, plant and equipment 1 264 954
Intangible assets, including goodwill 1 502 844
Associates 20 15
Other investments 294 239
Rental finance advances 86 77
Deferred taxation 196 182
Current assets 7 617 6 139
Inventories 2 130 2 013
Trade and other receivables 3 371 2 494
Assets classified as held-for-sale - 19
Cash and cash equivalents 2 116 1 613
Total assets 10 979 8 450
Equity and liabilities
Total equity 5 346 4 746
Non-current liabilities 1 047 389
Loans 784 149
Empowerment funding obligation 156 172
Provisions 24 38
Deferred taxation 83 30
Current liabilities 4 586 3 315
Loans 213 65
Empowerment funding obligation 16 -
Bank overdraft 33 24
Trade and other payables 3 903 2 940
Provisions 81 66
Liabilities classified as held-for-sale - 15
Taxation payable 340 205
Total equity and liabilities 10 979 8 450
Net asset value per share (cents) 1 431 1 261
Abridged cash flow statement
2008 2007
R millions (Audited) (Audited)
Cash flows from operating activities 1 304 10
Cash generated by operations 2 224 1 797
Net investment income 116 131
Changes in working capital (4) (998)
Taxation paid (537) (531)
Cash available from operating activities 1 799 399
Dividends paid, including to minority (495) (389)
shareholders
Cash flows applied in investing activities (1 532) (467)
Cash flows from/(applied in) financing 704 (120)
activities
Net increase/(decrease) in cash and cash 476 (577)
equivalents
Cash and cash equivalents - beginning of year 1 589 2 152
Translation differences on foreign cash 18 14
Cash and cash equivalents - end of year 2 083 1 589
Segmental analysis
% 2008 % 2007 %
R millions Change (Audited) (Audited)
Revenue
Telecommunications 26 7 462 35 5 932 35
Power electronics and 24 8 159 38 6 574 38
multimedia
Information technology 25 5 917 27 4 741 28
Corporate, financial (107) - (121) (1)
services and eliminations
25 21 431 100 17 126 100
Operating profit*
Telecommunications 19 641 33 539 35
Power electronics and 36 887 46 651 43
multimedia
Information technology 20 418 22 350 23
Corporate and financial (9) (1) (12) (1)
services
27 1 937 100 1 528 100
* Operating profit is stated before capital items
Operational contribution
% 2008 % 2007 %
R millions Change (Audited) (Audited)
Revenue
Altech 22 8 242 38 6 780 39
Bytes 27 5 186 24 4 088 24
Powertech 27 8 016 38 6 289 37
Corporate, financial (13) - (31) -
services and eliminations
25 21 431 100 17 126 100
Operating profit*
Altech 16 664 34 573 38
Bytes 12 365 19 325 21
Powertech 43 914 47 638 42
Corporate and financial (6) - (8) (1)
services
27 1 937 100 1 528 100
% held at
Headline 29
earnings February
2008
Altech 61,9 22 288 27 236 30
Bytes 100,0 47 170 16 116 15
Powertech 100,0 39 577 54 415 52
Corporate and 100,0 37 3 26 3
financial
services
35 1 072 100 793 100
* Operating profit is stated before capital items
Supplementary information
2008 2007
R millions (Audited) (Audited)
Borrowings 1 169 386
- interest bearing 983 212
- non-interest bearing 14 2
- empowerment funding obligation 172 172
Depreciation of property, plant and equipment 232 216
Amortisation of intangibles 40 19
Net foreign exchange gains 64 65
Capital expenditure 479 240
Contingent liabilities - 6
Capital commitments 111 61
Lease commitments 625 590
Payable within the next 12 months: 171 131
- property 117 96
- plant, equipment and vehicles 54 35
Payable thereafter: 454 459
- property 428 437
- plant, equipment and vehicles 26 22
Unlisted investments (including Associates)
- Carrying amount 314 254
- Directors` valuation 317 264
Weighted average number of shares (millions) 286 280
- Ordinary shares 95 94
- Participating preference shares 191 186
Diluted average number of shares (millions) 289 287
Shares in issue at end of year (millions) 312 280
- Ordinary shares 102 94
- Participating preference shares 210 186
Ratios
EBITDA 2 209 1 763
Operating margin (%) 9,0 8,9
ROCE (%) 29,7 29,8
ROE (%) 24,7 23,0
ROA (%) 23,2 23,9
RONA (%) 30,3 30,5
Borrowings ratio (%) 21,9 8,1
Current ratio 1.7:1 1.9:1
Acid test ratio 1.2:1 1.2:1
Abridged statement of changes in equity
R millions Attributable to Altron equity holders
Share Treasury Retained
capital
and premium shares Reserves earnings
Balance at 28 February 827 (222) (31) 2 357
2006 (Audited)
Recognised income and
expense
Profit for the year - - - 805
Foreign currency - - 56 -
translation
differences
Cash flow hedging - - 3 -
reserve
Fair value adjustments - - 1 -
Transactions with
shareholders
Issue of share capital 8 - - -
Dividends - - - (216)
Share-based payments - - 18 -
Change in shareholding - - (1) -
of subsidiaries
Purchase of own shares - (77) - -
Balance at 28 February 835 (299) 46 2 946
2007 (Audited)
Recognised income and
expense
Profit for the year - - - 1 019
Foreign currency - - 106 -
translation
differences
Release of translation - - 4 -
differences on
disposal
Cash flow hedging - - (1) -
reserve
Fair value adjustments - - 8 -
Transactions with
shareholders
Issue of share capital 1 375 - - -
Dividends - - - (331)
Share-based payments - - 23 -
Change in shareholding - - (1 262) -
of subsidiaries
Balance at 29 February 2 210 (299) (1 076) 3 634
2008 (Audited)
Abridged statement of changes in equity
R millions Attributable to
Altron equity
holders
Minority Total
Total interest equity
Balance at 28 February 2 931 1 103 4 034
2006 (Audited)
Recognised income and
expense
Profit for the year 805 284 1 089
Foreign currency 56 15 71
translation
differences
Cash flow hedging 3 2 5
reserve
Fair value adjustments 1 1 2
Transactions with
shareholders
Issue of share capital 8 - 8
Dividends (216) (173) (389)
Share-based payments 18 5 23
Change in shareholding (1) (19) (20)
of subsidiaries
Purchase of own shares (77) - (77)
Balance at 28 February 3 528 1 218 4 746
2007 (Audited)
Recognised income and
expense
Profit for the year 1 019 300 1 319
Foreign currency 106 27 133
translation
differences
Release of translation 4 3 7
differences on
disposal
Cash flow hedging (1) - (1)
reserve
Fair value adjustments 8 - 8
Transactions with
shareholders
Issue of share capital 1 375 - 1 375
Dividends (331) (164) (495)
Share-based payments 23 5 28
Change in shareholding (1 262) (512) (1 774)
of subsidiaries
Balance at 29 February 4 469 877 5 346
2008 (Audited)
Message to shareholders
Your directors are pleased to report that the Altron group has posted excellent
results for the year ended 29 February 2008. Revenue increased by 25% to a
record R21.4 billion and operating profit increased by 27% to R1.9 billion.
Headline earnings per share grew by a commendable 33% over the high base
established in the prior year. Encouragingly, all three of our operating
companies, namely: Altech, Bytes and Powertech recorded strong growth with
headline earnings per share increasing by 23% at Altech while Bytes and
Powertech increased headline earnings by 23% and 39%, respectively. Dividends
for the group increased by 32% to 156 cents per share, in line with earnings
growth, maintaining a dividend cover of 2.4 times.
Business environment
The impact of local power outages and political changes combined with the global
financial market turmoil, and the possibility of a US recession, have impacted
negatively on general market sentiment. At the same time, demand for
infrastructure development is continuing at the expected pace in both the public
and private sectors despite an increasing domestic interest rate environment and
world wide pressures on economic growth. Government`s focus on infrastructure
spend to create GDP growth and job creation, as well as to deliver on election
commitments, creates an environment conducive to strong demand for our group
products.
The infrastructure spending from state-owned enterprises and local authorities
has gained momentum, especially in light of the recent national electricity
supply crisis. Overall, the building and construction industry continues to grow
at expected levels with the commercial side remaining strong although there are
signs of lower residential housing demand. Rising interest rates and depressed
business confidence have impacted negatively on consumer spending, resulting in
a decline in the growth rate of residential housing plans passed, housing
prices, motor vehicle sales and retail credit sales. Notwithstanding these
unfavourable developments, group companies have performed exceptionally well.
The weakening of the rand has had a mixed effect on the group`s businesses,
resulting in improved earnings from foreign operations for some companies while
conversely leading to increased costs and reduced margins for others.
Sector review
In the telecommunications sector, the continuing de-regulation of the market is
creating numerous opportunities for growth in terms of the provision of telecom
cables, products and services. These opportunities include, among others,
Telkom`s capital expenditure programme, the launch of the second network
operator, Neotel, government`s plans for Infraco as well as the decision made by
mobile operators to "self provide" their own networks. Altech`s acquisition of a
majority shareholding in the Sameer ICT group, a leading broadband network
operator in East and Central Africa, is in line with group strategy to move
further up the telecoms value chain, and to expand its geographic presence in
Africa. This acquisition, furthermore, provides the opportunity to participate
in the high growth converged technology wave, which forms part of the group`s
TMT convergence strategy and also provides synergistic opportunities for the
greater group.
The power electronics sector remained buoyant during the period under review
although the residential building sector has shown signs of slowing. The
commercial market has remained strong and it is anticipated that this trend will
continue for the foreseeable future. The Powertech businesses showed significant
growth on the back of increased spending by Eskom and the municipalities as the
need for stabilising electricity supply intensified.
The power crisis in January has had a limited initial impact on group operations
in terms of productivity. The group has been preparing for standby power in many
of its businesses over the last few years and the necessary alternative power
supplies have, for the most part, been installed. At the same time the power
crisis has created opportunities and resulted in demand from businesses for
standby power solutions. In this regard the newly acquired IST business in
Powertech and Powertech Batteries, as well as the newly established Powertech
Energy Solutions business, have played a major role in providing alternative
power solutions with meaningful orders received to date.
Within the information technology sector, there has been an increase in the
local spend as current levels of company profitability provide funds for IT
development. This has increased demand for Bytes products, though it continues
to operate in a highly competitive market place. While the group`s South African
IT businesses experienced margin pressure during the period under review, mainly
due to adverse exchange rate movements and supplier delays, its international
businesses showed excellent growth with increased operating profits and a
significantly increased order book. Margin pressures are expected to continue
within this sector, although Bytes is well placed to meet these challenges based
on the diversity of its product range as well as its services offering and its
geographical spread.
Financial overview
The Altron group`s results for the year ended 29 February 2008 have shown strong
growth with a 33% increase in headline earnings per share.
Revenue increased by 25% from R17.1 billion in the prior year to R21.4 billion,
with operating profit increasing by 27% from R1.53 billion to R1.94 billion. The
group has increased its operating margin to 9.0%. Powertech has further enhanced
its operating margin to 11.4% from 10.1% during the prior year as a result of
operational leverage resulting from continuing high capacity utilisation. Altech
has seen a marginal reduction in its operating margin to 8.1% from 8.4%.
Similarly, Bytes has seen a decline in its normalised (excluding once-off
expenses associated with the acquisition of minorities) operating margin from
8.0% to 7.2% - largely due to the increased contribution from its lower margin
international operations. Excluding the impact of the UK National Health
Services contract, the operating margin would have been 7.8%.
During the period under review, the group invested R479 million in replacement
as well as capacity expansion, mainly focused on the more capital intensive
power electronics sector.
The group`s investment in working capital has been well managed during the year,
particularly in respect of the investment in inventory, despite higher trading
volumes and increased raw material prices. Cash flow generated from operating
entities increased from R399 million in 2007 to R1 799 million in 2008,
representing a 4.5 fold increase. This excellent performance has increased cash
on hand from R1.6 billion to R2.1 billion at the year end. Altron`s return on
equity improved to 24.7% with return on net assets and return on capital
employed maintained at 30.3% and 29.7%, respectively.
Subsidiary review
Altech delivered an excellent set of results for the financial year ended 29
February 2008, with headline earnings per share growing by 23% to 511 cents.
Revenue increased by 22% to R8.2 billion from R6.8 billion in the prior year.
Operating profit increased by 17% to R664 million with the operating margin
reducing marginally to 8.1%.
Altech Autopage Cellular performed well ahead of expectations, exceeding both
profitability and cash flow targets. The company increased its subscriber base
by over 115 000 - representing a 14% growth in new connections during the year.
Altech Netstar also maintained its leading market share position in the stolen
vehicle recovery market, producing excellent trading results despite a slow down
in new car sales, resulting from increased interest rates and the introduction
of the National Credit Act.
Altech UEC Multi-media increased revenue by more than 40% as a result of its
expanding international business. The operating margin has, however, reduced
from the prior year as the mix has moved more towards lower end products,
following the success of the PVR in the last financial year, as well as the
effect of outsourcing of production.
Altech NamITech continues to experience difficult trading conditions with an
operating loss being incurred by its South African operations, though this was
much reduced from last year. As a result, the goodwill relating to the South
African operations has been fully impaired in this financial year. The Altech
NamITech West Africa operations continue to perform strongly with the combined
operations recording a profit.
Altech`s balance sheet remains strong with a net asset value of 2,026 cents per
share and cash of R1.6 billion. Return on shareholder`s equity for the year was
25.4% and the dividend declared by Altech increased by 20%.
Bytes achieved revenue growth of 27% to R5.2 billion with particularly strong
revenue growth of 89% from the international operations, as a result of organic
growth and acquisitions concluded in the past financial year. A substantial
contribution came from the large contract with the UK`s National Health Service
that was disclosed at the half year. South African revenue growth was more
modest at around 7% in challenging trading conditions.
Operating profit improved by 12% from R325 million to R365 million and headline
earnings improved to R248 million, an increase of 23%. Normalised operating
margin declined from 8.0% to 7.2% mainly due to the increasing contribution of
the lower margin UK businesses to overall revenue. Operating margins within the
South African businesses were on the whole maintained, while the UK business saw
a marginal increase in their margins as the higher margin Xerox businesses
started to increase their contribution.
Powertech produced another excellent performance, reporting a 27% increase in
revenue to R8.0 billion as a result of the significant increase in power
infrastructure spend, the continuing strength of commercial property development
and strong demand from the mining industry. Operating profit increased by 43%
from R638 million to R914 million, while the operating margin increased from
10.1% to 11.4%. This improvement in Powertech`s operating margin is
predominantly due to improved trading conditions which drove volume
efficiencies, as a result of good capacity utilisation and effective cost
management. Powertech`s headline earnings improved by 39% to R577 million
compared to R415 million in the prior year.
Aberdare Cables` local operation continues to perform well, growing revenue by
32%. This revenue growth was assisted by the inclusion of an additional eleven
months of trading from our telecoms joint venture with Reunert, which
contributed R451 million for the year under review. Aberdare Cables`
international operations exceeded R1 billion in revenue for the first time and
produced improved operating margins. Powertech Transformers also benefited from
the infrastructure spend, growing revenue in excess of 22%.
Powertech Batteries saw good revenue growth and managed to improve its operating
margin on higher volumes. They are benefiting from the increase in new car sales
in recent years. Powertech Industrial has had a difficult year with import
competition and rationalisation costs eroding margins. Rationalisation plans
have been implemented which should see a return to normal margin levels in the
upcoming year.
Altron`s finance operations at the corporate level continue to run down with the
amortisation of Fintech Receivables 1, but are producing returns above
expectations as a result of high secondary rentals.
Corporate activity
The following significant transactions and corporate developments have taken
place:
- The conclusion of the acquisition by Powertech of the electrical
engineering operations of the IST group for R504 million and the subsequent sale
of 25.1% to empowerment partner Izingwe;
- The successful acquisition by Altron of the minorities in Bytes Technology
Group Limited for R1.4 billion. Bytes was de-listed from the JSE Limited on 15
January 2008;
- The conclusion of the acquisition by Altech of ComTech for R53 million,
effective 1 January 2008;
- The purchase by Altron of an additional 3.7% of Altech for R187 million at
an average price of R52.14 during February 2008, thereby increasing its stake in
Altech to 62%;
- The acquisition by Powertech of 25% minority in Cables de Comunicaciones,
Zaragoza, effective 1 August 2007;
- The acquisition by Powertech of Swanib Cables for R43 million, effective 1
March 2007.
Post year end:
- The acquisition by Altech of 51% of the Sameer ICT group in Kenya for a
maximum consideration of US$75 million with effect from 1 March 2008;
- The acquisition by Powertech of the 50% stake it did not own of ABB
Powertech Transformers from ABB for R320 million, effective 1 April 2008;
- The disposal by Powertech of Yelland Control to Omron Europe B.V. for R65
million, effective 1 April 2008.
Outlook
Despite the excellent trading results achieved by the group during the year
under review, the uncertainties and volatility in the economic environment at
present make it challenging to predict how these will impact on group
performance. However, the significant investments we have made both internally
and externally over the last few years, combined with a disciplined commitment
to our business model should provide a strong foundation for the group to
experience positive earnings growth in the forthcoming year, albeit not at the
high levels achieved over the last two years.
Acknowledgements
The board would like to express its appreciation to all of its customers, staff,
business partners, shareholders and other stakeholders for their ongoing
contributions and continued support towards the growth of our group as one of
the leading ICT and power electronics groups in Africa.
Directorate
Shareholders are referred to the SENS announcement published by Altron on 4
February 2008 advising that Ms Barbara Masekela had been appointed as an
independent non-executive director to the board of the company, with effect from
1 February 2008. Ms Masekela was previously South Africa`s Ambassador to France
and to the United States of America and has among others served as a director of
several public listed companies in South Africa. Shareholders are further
referred to the SENS announcement published on 22 January 2008 advising of the
resignation of Ms Diane Radley, Chief Financial Officer of the group on 29
February 2008 to take up the position of Group Finance Director of Old Mutual
South Africa.
Dividend
The following dividends are hereby declared for the year ended 29 February 2008:
- ordinary dividend No. 60 of 156 cents per share (2007: 118 cents)
- participating preference dividend No. 14 of 156 cents per share (2007: 118
cents).
The above dividends are payable as follows:
Last day of trading to qualify for and Friday, 20 June 2008
participate in the dividend (cum dividend)
Trading ex dividend commences Monday, 23 June 2008
Record date Friday, 27 June 2008
Dividend payment date (electronic and Monday, 30 June 2008
certificated)
Dividend cheques in payment of these dividends to certificated shareholders will
be posted to shareholders on or about Monday, 30 June 2008. Electronic payment
to certificated shareholders will be undertaken simultaneously.
Shareholders who have dematerialised their share certificates will have their
accounts at their central securities depository participant or broker credited
on Monday, 30 June 2008.
In the case of certificated shareholders, notice of any change of address of
shareholders must reach the transfer secretaries, Computershare Investor
Services (Pty) Limited, on or before Friday, 20 June 2008. Share certificates
may not be de-materialised or re-materialised from Monday, 23 June 2008 to
Friday, 27 June 2008, both days inclusive.
Annual General Meeting
Altron`s 62nd annual general meeting will be held in the Boardroom, Altech
Corporate Offices, 79 Central Street, Houghton, Johannesburg on Tuesday, 15 July
2008 at 09:30. Further details on the company`s annual general meeting will be
contained in Altron`s annual report to be posted to shareholders on or about 31
May 2008.
On behalf of the board
Dr Bill Venter Robert Venter
Chairman Chief Executive
6 May 2008
Board of directors
Independent non-executive
Mr MJ Lamberti, Mr MJ Leeming, Dr PM Maduna, Ms BJM Masekela, Mr JRD Modise, Mr
PL Wilmot
Non-executive
Mr MC Berzack
Executive
Dr WP Venter (Chairman), Mr RE Venter (Chief Executive), Mr N Claussen, Mr PMO
Curle*, Mr PD Redshaw*, Dr HA Serebro, Mr CG Venter * British
Secretaries
Altron Management Services (Pty) Limited -
AG Johnston (Group Company Secretary)
Sponsor
Investec Bank
The preliminary financial results are also available on the internet at
www.altron.co.za
Date: 06/05/2008 08:00:28 Produced by the JSE SENS Department.
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JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
