Altech plans African buy with R1.2bn
October 9, 2003
By Gugulakhe Masango
Johannesburg - Allied Technologies (Altech), the multimedia, telecommunications, electronics and information technology group, was at an advance stage of making an African acquisition to use the R1.2 billion cash in its bank account, it said yesterday.
"We have been under cautionary for few months and it relates to more than NamITech," said Craig Venter, the chief executive.
"The acquisition could be significant to our future as a group."
He warned that Altech had always felt that the way to do acquisitions was to be careful as opposed to doing many deals in one time.
However, on Tuesday the Competition Commission raised fears that the merger of Altech with NamITech would create a monopoly in the smart card market.
"We will fight to make sure that we acquire NamITech," Venter said.
Altech intends to pay R500 million to acquire NamITech. The commission has recommended that the Competition Tribunal block the merger.
Altech is showing no signs of slowing down its growth. Figures for the six months to August, released yesterday, showed that the group's headline earnings a share rose 10 percent to R1.439.
Operating profit increased 6.5 percent to R159 million and attributable profit was down to R140 million.
"We have done an exceptional job in containing costs in the difficult global and local business," Venter said.
"We are getting significant benefits in our convergence strategy of multimedia, information technology and telecoms."
He said the multimedia business was receiving significant orders worth R520 million from Foxtel in Australia, RCN in the US, Brazil and Mexico.
Autopage Cellular, the telecoms unit, had recorded more than 11 500 net subscribers to 465 000 subscribers. It increased its revenue by 76.1 percent to R1.4 billion.
Altech said Netstar had maintained its 47 percent market share and its subscribers had increased to 264 000 vehicles valued in excess of R31 billion.
UEC, the multimedia business, had also performed well.
Altech's total revenue increased 8.5 percent to R1.9 billion and it would continue to grow as operations grew.
"We have a track record of seven-year growth and that shows that our growth is sustainable for the future," said Venter.
He said the next six months would be tough but the group remained committed to creating long-term shareholder value.
"We will make sound and appropriate acquisitions," he said.
Altech lost 45c to R27.05.
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