| Thu 5 Feb 2009, 8:00 | | ATN / ATNP - Altron - Trading Statement |
|
ATN ATNP
ATN
ATN / ATNP - Altron - Trading Statement
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
("Altron" or "the company")
Trading Statement
Shareholders are referred to the outlook statement contained in Altron`s
abridged unaudited consolidated interim financial results for the six month
period ended 31 August 2008 when it was reported that inter alia:-
- the recent slowdown in the building and construction sector, particularly
the residential segment of the market, would affect certain key businesses
within the Powertech group; and
- the global financial market turmoil, as well as pressures locally, had
created further uncertainty around future trading conditions.
These concerns have been borne out in the last five months, with our main
operations having been affected as follows:
- Powertech has experienced a difficult trading period as a result of the
slowdown in the building and construction sector which has impacted
primarily on the energy cables business. This combined with the impact of
the rapid and unprecedented fall in commodity prices, particularly copper
from approximately US$9,000 per ton to approximately US$3,000 per ton, has
required inventory write downs in line with accounting standards. Levels
of manufacturing output have also been reduced in line with decreased
market demand and excessive levels of cable inventory in the distribution
channel. This has resulted in manufacturing volumes being significantly
down in the second half of the financial year, which adversely impacted
operating margins. As demand is expected to remain weak until the building
and construction sector recovers, management are considering mothballing
certain manufacturing facilities in the energy cables business. The
remaining businesses within Powertech are performing well in a difficult
environment and have shown pleasing growth;
- Byte has shown resilience despite current market conditions and is expected
to produce results at approximately the same level as the prior year. The
global financial crisis has negatively impacted upon the buying decisions
of several financial institutions, which form a large portion of Bytes`
customer base, resulting in the deferral and in certain circumstances the
cancellation of orders for IT equipment and related services. In addition,
increasing pricing pressures are being experienced for those projects that
are proceeding. As disclosed at the half year, the Bytes group`s
empowerment partner, Kagiso, exercised their option to acquire a further
22% equity interest in Bytes SA effective July 1, 2008, which has reduced
the level of earnings attributable to Altron after this date.
- Altech continues to deliver strong performance in what is a tough trading
environment, benefiting from sound strategic decisions including its high
proportion of annuity income. Revenue and operating profits have increased
as a result of a pleasing performance from most of its operations combined
with the benefit of recent acquisitions. Operating margins have improved,
partially as a result of the high margin Sameer ICT Group acquisition,
which continues to perform well. Shareholders are referred to Altech`s
announcement published on SENS on 04 February 2009.
Accordingly, shareholders are advised that a reasonable degree of certainty
exists that the company`s basic earnings per share for the year ending 28
February 2009 are expected to be between 18% to 30% lower as against the
previous corresponding period, while headline earnings per share for the year
ending 28 February 2009 are expected to be between 25% to 35% lower as against
the previous corresponding period. Furthermore, the company expects that its
diluted adjusted headline earnings per share for the year ending 28 February
2009 will be between 15% to 25% lower as against the previous corresponding
period. This calculation includes an adjustment for the amortisation of
intangibles arising from recent acquisitions. Management considers this to be
the most meaningful measure of profitability for the company.
The ranges provided above may be subject to further change depending on the
final values of the rand and various commodity prices at the year-end.
Furthermore, certain Altron subsidiaries will be conducting impairment testing
on various of their assets as part of the preparation of the year-end financial
statements, the results of which may also affect the range of Altron`s earnings
per share.
Altron`s annual financial results for the financial year ending 28 February 2009
are expected to be announced on or about 05 May 2009.
This trading statement has not been reviewed or reported on by Altron`s external
auditors.
By order of the board.
Johannesburg
05 February 2009
Sponsor
Investec Bank Limited
Date: 05/02/2009 08:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
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.
