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ATN ATNP
ATN
Altron - Abridged audited consolidated financial statements for the year ended
28 February 2006
Allied Electronics Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1947/024583/06)
Share code: ATN & ISIN: ZAE000029658
Share code: ATNP & ISIN: ZAE000029666
("Altron" or "the company")
Abridged audited consolidated financial statements for the year ended 28
February 2006
Highlights
HEPS increases by 17%
Revenue growth of 14%
Operating income exceeds R1 billion
Strong balance sheet with cash on hand of over R2 billion
Dividend up 24%
Abridged income statements
% 2006 2005
(IFRS
R millions Change (Audited) restated)
Revenue 14 13 969 12 206
Operating profit before capital items 1 040 963
Investment income 112 100
Finance costs (53) (62)
Share of profit from associates 32 24
Capital items (Note 1) (54) (90)
Profit before taxation 1 077 935
Taxation (326) (339)
Profit for the year 26 751 596
Attributable to minority shareholders 257 148
Attributable to Altron equity holders 494 448
Basic earnings per share (cents) 9 176 162
Diluted basic earnings per share 8 168 155
(cents)
Dividends per share paid (cents) 63 52
Dividends per share declared (cents) 78 63
Weighted average number of shares in 280 276
issue (millions)
Ordinary shares 94 94
Participating preference shares 186 182
Diluted average number of shares 283 282
(millions)
Abridged balance sheets
2006 2005
(IFRS
R millions (Audited) restated)
Assets
Non-current assets 2 114 2 413
Property, plant and equipment 905 848
Intangible assets 773 925
Associates and other investments 228 453
Rental finance advances 90 75
Deferred taxation 118 112
Current assets 5 423 4 542
Inventories 1 295 1 158
Accounts receivable 1 976 1 864
Cash and cash equivalents 2 152 1 520
Total assets 7 537 6 955
Equity and liabilities
Total equity 4 034 3 643
Non-current liabilities 343 799
Loans 124 544
Empowerment funding obligation 173 172
Provisions 25 30
Deferred taxation 21 53
Current liabilities 3 160 2 513
Loans 238 59
Trade and other payables 2 680 2 223
Provisions 55 67
Taxation payable 187 164
Total equity and liabilities 7 537 6 955
Net asset value per share (cents) 1 040 963
Shares in issue at end of period (millions) 282 278
- ordinary shares 94 94
- participating preference shares 188 184
Abridged statement of changes in equity
Attributable to equity holders of Altron
Share
capital Treasury Retained Minority Total
and
R millions premium shares Reserves earnings Total interest equity
Balance at
29
February
2004
(IFRS 789 (222) 247 1 712 2 526 1 037 3 563
restated)
Profit for - - - 448 448 148 596
the year
Dividends - - - (143) (143) (81) (224)
Issue of 17 - - - 17 - 17
share
capital
Foreign
currency
transla-
tion
Differ- - - (35) - (35) 13 (22)
rences
Release of - - (67) - (67) - (67)
transla-
tion
surpluses
Cash flow - - 1 - 1 1 2
hedging
reserve
Share- - - 1 - 1 1 2
based
payments
Fair value - - (16) - (16) - (16)
of invest-
ments
Change in
share-
holding
of - - (53) - (53) (210) (263)
subsidia-
ries
Minorities - - - - - 55 55
arising on
acquisi-
tions
Transfer - - (22) 22 - - -
between
reserves
Balance at
28
February
2005
(IFRS 806 (222) 56 2 039 2 679 964 3 643
restated)
Profit for - - - 494 494 257 751
the year
Dividends - - - (176) (176) (106) (282)
Issue of 21 - - - 21 - 21
share
capital
Foreign
currency
Transla- - - (3) - (3) (1) (4)
tion
different-
ces
Release of - - (9) - (9) - (9)
transla-
tion
surpluses
Cash flow - - (3) - (3) (1) (4)
hedging
reserve
Share- 2 2 - 2
based
payments
Fair value 8 8 - 8
of invest-
ments
Change in
share-
holding
of (82) (82) - (82)
subsidia-
ries
Disposal - (10) (10)
of
subsidiary
Balance at
28 827 (222) (31) 2 357 2 931 1 103 4 034
February
2006
(Audited)
Abridged cash flow statements
2006 2005
(IFRS
R millions (Audited) restated)
Cash flows from operating activities 819 750
Cash generated by operations 1 179 1 122
Net investment income 39 40
Changes in working capital 233 78
Taxation paid (350) (266)
Cash available from operating activities 1 101 974
Dividends paid, including to minority (282) (224)
shareholders
Cash flows from investing activities (62) (1 381)
Cash flows from financing activities (122) 155
Net increase/(decrease) in cash and cash 635 (476)
equivalents
Cash and cash equivalents - beginning of year 1 520 2 004
Translation differences of foreign cash (3) (8)
Cash and cash equivalents - end of year 2 152 1 520
Notes
2006 2005
(IFRS
R millions (Audited) restated)
Headline earnings per share (cents) 17% 189 162
Diluted headline earnings per share 16% 178 153
(cents)
1. Capital items
Net gain on disposal of property, 7 7
plant and equipment
Impairment losses (100) (200)
Goodwill adjustment on utilisation (38) (4)
of at acquisition tax losses
Net gain/(loss) on disposal and 68 (4)
closure of businesses
Release of restructure provision - 44
Foreign currency translation reserve 9 67
realised
(54) (90)
2. Reconciliation between earnings and
headline earnings
Attributable to Altron equity 494 448
holders
Capital items - gross 54 90
Tax effect of capital items 9 (10)
Minority interest in capital items (28) (83)
Headline earnings 529 445
3. Reconciliation between attributable
earnings and diluted earnings
Attributable to Altron equity 494 448
holders
Additional earnings attributable to (28) (18)
BEE minorities in subsidiaries
Minority interest in adjustments 12 9
Dilution in earnings of subsidiary (3) (1)
dilutive options
Diluted earnings 475 438
4. Reconciliation between headline
earnings and
diluted headline earnings
Attributable to Altron equity 529 445
holders
Additional earnings attributable to (38) (19)
BEE minorities in subsidiaries
Minority interest in adjustments 16 9
Dilution in earnings of subsidiary (3) (5)
dilutive options
Diluted headline earnings 504 430
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 (BTG SA)
effective 1 March 2004 adjusted for the dilutive effect of the option price at
BTG SA level.
- The recognition of the deferred sale of 30% interest of the Izingwe
Consortium in Aberdare Cables based on the assumption that a portion of the
purchase price will be settled in cash of R173 million. The effective option was
anti-dilutive in the current and prior years and consequently no dilution was
calculated.
- The dilution in earnings of subsidiary dilutive options.
Adoption of International Financial Reporting Standards
1. Basis of preparation
The group has adopted International Financial Reporting Standards (IFRS) for the
year ended 28 February 2006.
The abridged consolidated financial statements have been prepared on the basis
of IFRS and interpretation statements in issue and effective at 28 February
2006.
The abridged consolidated financial statements have been prepared in accordance
with IAS 34 - Interim Financial Reporting and in compliance with the Listings
Requirements of the JSE Limited.
Accounting policies adopted under IFRS have been applied consistently in
preparing the financial statements for the year ended 28 February 2006, the
comparative information for the year ended 28 February 2005 and the opening
balance sheet on 1 March 2004.
An explanation of how the transition to IFRS has affected the previously
reported financial position and performance of the group is provided below.
The auditors KPMG Inc have audited the annual financial statements for the year
ended 28 February 2006 and their unqualified audit report is available for
inspection at the company"s registered office.
2. Significant changes to the group"s accounting policies as a result of the
adoption of IFRS and other adjustments
Foreign operations
The assets and liabilities of all foreign operations, including goodwill and
fair value adjustments arising on consolidation, are translated to Rands at
foreign exchange rates ruling at the balance sheet date. The revenues and
expenses of foreign operations are translated to Rands at rates approximating
the foreign exchange rates ruling at the date of the transactions. Foreign
exchange differences arising on translation are recognised directly in a
separate component of equity - foreign currency translation reserve. The foreign
currency translation reserve applicable to a foreign operation is released to
the income statement upon disposal of that foreign operation. The functional
currency of all entities in the group has also been reconsidered.
Previously, the non-monetary assets and liabilities of all foreign subsidiaries
considered to be integrated foreign operations were translated at historic
exchange rates, and the foreign exchange gains and losses arising on translation
of monetary assets and liabilities were recognised in operating income.
Goodwill
All business combinations are accounted for by applying the "purchase method".
Goodwill represents amounts arising on acquisition of subsidiaries and
associates. In respect of business combinations that have occurred since the
IFRS transition date, 1 March 2004, goodwill represents the difference between
the cost of the acquisition and the fair value of the net identifiable assets
and contingent liabilities acquired.
From 1 March 2004 goodwill is stated at cost less accumulated impairment losses.
Goodwill is allocated to cash-generating units and is no longer amortised but
tested annually for impairment. Previously goodwill arising on each acquisition
was amortised over its useful life on a straight line basis and subjected to
annual impairment testing.
The group made an election in terms of IFRS 1 that in respect of acquisitions
prior to this date, goodwill is included on the basis of its deemed cost, which
represents the amount recorded under SA GAAP on 1 March 2004. The classification
and accounting treatment of business combinations that occurred prior to 1 March
2004 has not been reconsidered in preparing the group"s opening IFRS balance
sheet at 1 March 2004.
Premiums and discounts arising on subsequent purchases from, or sales to,
minorities.
Any increase or decrease in ownership interests in subsidiaries without a change
in control are recognised as equity transactions in the consolidated financial
statements. Accordingly any premium or discount on subsequent purchases or sales
of equity instruments from or to minority interests are recognised directly in
the equity of the parent shareholder.
Previously premiums on subsequent sales of equity instruments to minorities were
taken to profit as a capital item in the income statement and premiums on
subsequent purchases of equity instruments were classified as goodwill.
Intangible assets
Intangible assets other than goodwill that are acquired by the group are stated
at cost less accumulated amortisation and impairment losses.
Amortisation is charged to the income statement on a straight-line basis over
the estimated useful lives of intangible assets unless such lives are
indefinite. Intangible assets with an indefinite useful life are tested annually
for impairment.
Other intangible assets are amortised from the date they are available for use.
The estimated useful lives are currently as follows:
Patents and trademarks 5 years
Distribution rights indefinite life
Previously distribution rights were included with goodwill and not separately
identified on the balance sheet and amortised to the income statement as part of
goodwill amortisation on a straight-line basis over the useful life of the
intangible asset.
Share-based payment transactions
The fair value of share options and deferred delivery shares granted to
employees is recognised as an employee expense with a corresponding increase in
equity. The fair value is measured at grant date and expensed over the period
during which the employees are required to provide services in order to become
unconditionally entitled to the equity instruments. The fair value of the
instruments granted is measured using generally accepted valuation techniques,
taking into account the terms and conditions upon which the instruments are
granted. This accounting policy has been applied to all equity instruments
granted after 7 November 2002 that had not yet vested at 1 January 2005. The
fair value of share-based payments was not recognised under the group"s previous
accounting policies.
Black Economic Empowerment (BEE) transactions
Where goods or services are considered to have been received from BEE partners
as consideration for equity instruments of the group, these transactions are
accounted for as share-based payment transactions, even when the entity cannot
specifically identify the goods or services received. This accounting policy is
applicable to equity instruments that had not vested by 1 January 2005 (as
above) and consequently had no impact on the group.
Straight-lining of operating lease payments
Payments made under operating leases are recognised in the income statement on a
straight-line basis over the term of the lease. Past practice, whereby operating
lease payments were expensed on a payments basis, was based on an interpretation
that was generally accepted in the South African financial reporting community.
This interpretation considered the contractual payments basis as being most
representative of the time pattern of the entity"s benefit obtained from the
leased property. The global spotlight has led to the view that the entity is
obliged to adopt the straight-line basis of accounting for all lease payments.
The adjustment has been made as required by IAS 8 - Accounting Policies, changes
in accounting estimates and errors, with the necessary restatement of
comparative figures.
Designation and fair valuing of available-for-sale investments
Available-for-sale investments are non-derivative financial assets other than:
(a) those that the group upon initial recognition designates as at fair value
through profit or loss;
(b) held to maturity assets; and
(c) those that meet the definition of loans and receivables.
Gains or losses from fair valuing these available-for-sale investments are
recognised directly in equity.
The investments in Fintech Receivables 1 and Technologies Acceptances
Receivables meet this criteria and as such have been designated as available-for
sale assets and are measured at fair value. The comparative figures have been
restated.
3. Reconciliation of equity
28 February 1 March
R millions 2005 2004
Equity previously reported under SA GAAP 3 566 3 571
Impact of adopting IFRS and other adjustments 77 (8)
Equity reported under IFRS 3 643 3 563
Equity adjustments
Retained earnings:
Net reversal of goodwill amortised and 96 -
impaired
Expensing of share-based payments (2) -
Foreign operations 3 -
Property, plant and equipment 1 -
Intangible assets (2) -
Operating leases (13) (9)
Minorities" share of adjustments (40) 4
Share-based payments reserve 1 -
Foreign currency translation reserve (3) -
Fair value reserve 26 42
Treasury shares reclassified 16 16
Premium/discount on minority equity (16) (16)
transactions
Minorities" shareholder loans reclassified (31) (41)
Minorities" share of adjustments 41 (4)
77 (8)
Assets and liabilities adjustments
Property, plant and equipment 1 -
Intangible assets and goodwill 94 -
Associates and other investments 30 49
Deferred tax (1) (5)
Non-current loans (31) (41)
Accounts payable (16) (11)
77 (8)
4. Reconciliation of profit for the year ended 28 February 2005
As
reported
previously Effect IFRS
R millions (Audited) of IFRS restated
Operating profit before capital 968 (5) 963
items
Investment income 100 - 100
Finance costs (62) - (62)
Share of profits from 24 - 24
associates
Goodwill adjusted and impaired (300) 96 (204)
Capital items 114 - 114
Profit before taxation 844 91 935
Taxation (340) 1 (339)
Profit for the year 504 92 596
Attributable to :
Minority shareholders 104 44 148
Altron equity holders 400 48 448
EPS 145 17 162
HEPS 161 1 162
5. Reclassification of finance lease receivables and payables
Previously certain finance lease receivables and payables were offset; these
have been grossed up and reported separately as the criteria for offset are no
longer considered applicable. The effect of the reclassification at 28 February
2005 is as follows:
Assets
Decrease in rental finance advances (31)
Increase in accounts receivable (short-term portion of 84
rental finance advances)
53
Liabilities
Increase in non-current loans 24
Increase in current loans 29
53
Business segmental analysis
2006 2005
R millions (Audited) % (IFRS %
restated)
Revenue
Telecommunications 5 387 39 4 713 39
Power electronics & multimedia 4 402 31 3 723 31
Information technology 4 270 31 3 835 31
Corporate, financial services and (90) (1) (65) (1)
eliminations
13 969 100 12 206 100
Operating profit*
Telecommunications 449 43 356 37
Power electronics & multimedia 276 27 227 23
Information technology 321 31 372 39
Corporate and financial services (6) (1) 8 1
1 040 100 963 100
* Operating profit is stated before capital items
Operational contribution
2006 2005
R millions (Audited) % (IFRS %
restated)
Revenue
Altech 6 041 43 5 552 45
BTG 3 470 25 2 906 24
Powertech, corporate, 4 458 32 3 748 31
financial services and
eliminations
13 969 100 12 206 100
Operating profit*
Altech 485 47 491 51
BTG 282 27 221 23
Powertech, corporate and 273 26 251 26
financial services
1 040 100 963 100
% held
at
Headline earnings 2006
Altech 57,7 214 40 192 43
BTG 57,6 111 21 73 16
Powertech, corporate and
financial services 100,0 204 39 180 41
529 100 445 100
* Operating profit is stated before capital items
Supplementary information
2006 2005
(IFRS
R millions (Audited) restated)
Depreciation and amortisation 213 192
Capital expenditure 315 333
Contingent liabilities 27 27
Capital commitments 70 77
Lease commitments 484 442
Payable within the next 12 months: 117 133
- property 84 92
- plant, equipment and vehicles 33 41
Payable thereafter: 367 309
- property 348 273
- plant, equipment and vehicles 19 36
Unlisted associates and investments
- Carrying amount 228 453
- Directors" valuation 235 479
Commentary
Message to our shareholders
Your directors are pleased to report that Altron has posted strong results for
the financial year ended 28 February 2006.
Key market conditions
The South African economy remained buoyant during the year under review,
characterised by a continuing strength of the rand, lower than expected
inflation, stable interest rates and sharply higher equity markets. Government"s
announcements concerning accelerated infrastructure spend have reinforced its
commitment to reach the targeted GDP growth of 5%-6% per annum.
The draft Broad Based Black Economic Empowerment (BBBEE) Codes of Good Practice
released by the Department of Trade and Industry in December 2005, provide more
certainty as to how the BBBEE scorecards will be measured, but it is clear that
in their present form the significant administrative and cost implications of
these codes will need to be addressed.
Momentum towards a liberalised market within the Telecommunications sector
accelerated during the period under review with the formal introduction of the
second network operator, mobile number portability (expected in July 2006), the
handset subsidies investigation, the Electronic Communications Bill and ICASA"s
stated desire to license additional operators in the satellite television
broadcast market. The Altron group, particularly through Altech and to a lesser
degree BTG, is well positioned to benefit from this trend. The mobile
telecommunications market, both in South Africa and in Africa, continues to
demonstrate healthy growth.
The favourable conditions in the Power Electronics and Multi-media sector have
continued due to increased capital expenditure on infrastructure projects. In
addition, there has been accelerated spending on increasing power generation and
distribution capacity and on improving the reliability of the country"s power
transmission and distribution network. The building and construction industry
has maintained good growth levels. This has resulted in increased opportunities
for group companies involved in infrastructure development, particularly
Powertech. However, import competition, particularly from China and other
emerging markets, remains a threat and requires focus on manufacturing
efficiencies, innovative design and customer service. Within the multi-media
environment, market demands are stimulating growth for higher functionality set-
top boxes such as personal video recorders, which has had a beneficial impact on
Altech"s results.
The outlook for the Information Technology sector is improving with increased
local spend on information technology evident as current levels of company
profitability provide the capacity for investment. This is well demonstrated in
the results of our BTG subsidiary. However, the slower than anticipated adoption
of the global EMV (Eurocard/Mastercard/Visa) standard in the domestic banking
environment has impacted demand for secure cards in the short term.
Opportunities are evident for continued consolidation within the local
information technology sector which will provide further potential for the
Altron group to enhance critical mass and broaden product portfolios.
Financial overview
In accordance with JSE Limited Listings Requirements the Altron group is
reporting under International Financial Reporting Standards (IFRS) and has
restated the prior year"s results to comply with IFRS.
Altron has shown pleasing growth for the year ended 28 February 2006 with
revenues rising by 14% to R14,0 billion from R12,2 billion in the prior year and
operating income exceeding R1 billion for the first time. Headline earnings per
share, at 189 cents, increased by 17% on the prior year. A deferred tax asset
has been raised in the current year relating to the acquired CS Holdings
businesses which have returned to profitability as well as tax losses incurred
in some Altech subsidiaries which are anticipated to be utilised in the short
term. The positive impact of this on Altron"s results has been partially offset
by trading losses in the first six months of the year at Aberdare Telecoms which
are non-recurring as the operation was subsequently closed, effective 31 August
2005.
The slight operating margin decrease from 7,9% to 7,4%, caused by declines in
the overall operating margins at Altech and Powertech were mitigated to some
extent by improved margins at BTG"s operations. On a continuing basis, adjusting
for the closure of the Aberdare Telecoms business and the divestiture of Econet
Wireless Global Ltd (EWG), operating margins are at 7,8%.
Profit before tax increased by some 15% to R1,1 billion partly due to profits
from the disposal of Altech"s shareholding in EWG as well as the non-recurrence
of the prior year"s goodwill write-down on BTG"s offshore operation, Plato. This
increase was partially offset by a goodwill impairment of R82 million at Altech
NamITech. These factors, together with a lower effective tax rate during the
year, resulted in an increase in profit after tax of 26% to R751 million and a
rise in attributable earnings of 10% to R494 million. Headline earnings grew by
19% to R529 million, reflecting the underlying and satisfactory trading
performance.
Sound working capital management throughout the Altron group was reflected in
improved year-end cash balances. The net investment in working capital improved
from 22 days in the prior year to 15 days in the year under review. Altron"s
annualised return on equity has increased to 16,9%, return on capital employed
has improved to 22,7% and return on operating assets reached 20,6%. The balance
sheet remains strong with cash at R2,2 billion, compared to R1,5 billion in the
prior year. Altron has remained committed to investing in capacity within its
operations and incurred capital expenditure of R315 million during the year
under review.
Altech results for the year ended 28 February 2006 reflected a growth in
headline earnings per share of 12% to 379 cents per share. This was driven by
better-than-expected performances from most of its operating companies including
Altech Autopage Cellular, Altech Netstar, Altech Card Solutions and Altech Isis.
Altech NamITech experienced pricing pressures coupled with some management
issues which adversely impacted the South African operations, in particular. As
a result of this underperformance and the closure of certain operations, a
goodwill impairment of R82 million has been recorded in the current year. The
necessary corrective actions have been taken at Altech NamITech in terms of
management changes, a business realignment and a restructuring exercise in order
to reposition Altech NamITech as a strong contributor to the group.
Revenue increased by 9% to R6,0 billion from R5,5 billion for the prior year
with operating income at R485 million. Altech"s balance sheet remains strong
with a net asset value of 1 721 cents per share and cash of R1,5 billion. Return
on shareholder"s equity is over 22%. During the year under review a five-year
service provider and incentive agreement, with an option to renew for a further
five years, was signed between Altech Autopage Cellular and Vodacom. Agreements
are also in place with Cell C and MTN, the latter also having been signed during
the year under review. Altech disposed of its 50% plus 1 share in EWG for a cash
consideration of US$87,5 million plus interest, generating a consolidated profit
of R129 million on the disposal of this investment.
BTG reported a strong performance for the year under review with headline
earnings per share growing by 48% to 127,7 cents from 86,4 cents. On an adjusted
basis, when excluding the once-off impact of raising a deferred tax asset,
headline earnings per share increased by 27% to 109,4 cents. Revenue increased
by 19% to R3,5 billion compared to R2,9 billion for the prior year, reflecting
organic growth of 10%, the inclusion of the businesses acquired from CS Holdings
for the full year, and the consolidation of 100% of Digital Healthcare Solutions
revenues. Operating income improved by 28% from R221 million to R282 million
compared to the previous year as a result of margin improvements at all the BTG
operations, as well as the return to profitability of the BTG UK operations.
All the South African operations performed commendably. Cash generated by these
companies was strong at R329 million and resulted in a pleasing net funds
position of R77 million as of 28 February 2006.
Powertech"s results for the year under review reflect positive performances from
its operating business units, including ABB Powertech Transformers, Aberdare
Cables, the Powertech Battery Group and the Powertech Industrial Group. Revenue
increased by 19% to R4,5 billion from R3,7 billion and operating income grew by
14% from R245 million to R280 million notwithstanding increased margin pressure
from imports. For the most part, the increasing price of copper was passed on to
customers in accordance with supply agreements which resulted in some lower
recorded margins. The Aberdare Cables power cable business delivered good
results for the year but the continued downturn in the telecoms market required
a restructure of the copper and fibre telecom cables operations resulting in the
closure of the manufacturing plant in Port Elizabeth.
Our finance operations produced an improved contribution to the group results.
This was mainly due to higher secondary rental income. During the year, Altron
disposed of its 33% stake in Fintech (Pty) Limited to Fintech management and
Sanlam Investment Management, in line with the group"s long-term objectives.
Fintech Receivables 1 (FR1), Altron"s securitised interest in the financing
book, is amortising in line with expectations. Moody"s recently re-rated the FR1
Class B Secured Floating Rate Notes to A3.za from Baa2.za. Future funding
requirements for BTG products is being provided by the Technologies Acceptances
Receivables warehouse now housed within BTG.
Black Economic Empowerment (BEE)
The Altron Transformation Vision 2010 document, which is essentially a group
internal charter and scorecard, reflects Altron"s commitment to Black Economic
Empowerment (BEE). Through its anchor partnerships with leading empowerment
firms Pamodzi, Kagiso and Izingwe, significant value is being added in terms of
commercial input and in meeting various Altron Transformation Vision 2010
targets on the broader BEE indicators, namely skills development, employment
equity, affirmative procurement, enterprise development and corporate social
investment. The Altron Transformation Vision 2010 is a dynamic document that
will be aligned with the ICT charter and the Department of Trade and Industry"s
Broad Based BEE Codes of Good Practice, once these are finalised.
Corporate activity
During the year, the following transactions and developments took place:
* Altech Autopage Cellular successfully concluded five-year service provider and
incentive agreements with Vodacom and MTN;
* Altron increased its holding in BTG to 57,6% with the acquisition of 11
million shares for a consideration of R118 million;
* BTG purchased Altron"s interest in the funding structure of BTG"s inter group
lease financing business for R43 million;
* BTG SA increased its shareholding in Digital Healthcare Solutions from 39,3%
to 100%;
* Powertech acquired Calidus Von Roll Isola (Pty) Limited, a leader in the
electrical insulation business for a consideration of R32 million; and
* Altech disposed of its 50% plus 1 share in EWG to the remaining EWG
shareholders for a consideration of US$87,5 million, plus interest.
Subsequent to year end, the following transactions took place:
* Altech purchased MobiMaster, a specialist telecommunications real-time
converged (pre- and post paid) billing system provider business from listed
French company, Linedata Services; and
* BTG acquired Xclusive Solutions, a leading provider of document and print
solutions and Xerox partner in the United Kingdom, for an initial consideration
of GBP3,2 million that could increase to a maximum of GBP4,5 million depending
on future profit performance.
Outlook
Your directors remain positive about the short- to medium-term outlook for the
Altron group"s businesses based on the following factors:
* the government"s commitment to increase investment in the country"s power
generation, transmission and distribution capacity;
* the forecast for infrastructure spend required to meet the needs of the Soccer
World Cup 2010;
* the continuing strong conditions in the building and construction industries;
* the conversion of the financial industry to the EMV standard;
* the deregulation of and growth in the rapidly expanding South African telecoms
industry; and
* the improving business environment in the IT sector.
As a result, your directors expect further real growth in earnings for the year
ahead.
Acknowledgements
The board expresses its appreciation to all its stakeholders, customers, staff,
business partners and shareholders, for their ongoing contributions and support
which enabled our group to continue to grow as one of the leading ICT and power
electronics groups in Africa.
Directorate
Shareholders are referred to the SENS announcement published on 3 May 2006 which
advised that Mr Douglas Ramaphosa had been appointed to the Altron board as an
alternate director to Dr H A Serebro. Douglas joined Altron as the Group
Executive: Corporate Affairs effective 1 May 2006.
Dividends
The following dividends are hereby declared for the year ended 28 February 2006:
- ordinary dividend No. 58 of 78 cents per share (2005: 63 cents);
- participating preference dividend No.12 of 78 cents per share (2005: 63
cents).
The above dividends are payable as follows:
Last day of trading to qualify for and Friday, 23 June 2006
participate in the dividend (cum dividend):
Trading ex dividend commences: Monday, 26 June 2006
Record date: Friday, 30 June 2006
Dividend payment date (electronic and Monday, 3 July 2006
certificated)
Dividend cheques in payment of these dividends to certificated shareholders will
be posted to shareholders on or about Monday, 3 July 2006. 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, 3 July 2006.
In the case of certificated shareholders, notice of any change of address of
shareholders must reach the transfer secretaries, Computershare Investor
Services 2004 (Pty) Limited, on or before Friday, 23 June 2006. Share
certificates may not be de-materialised or re-materialised from Monday, 26 June
2006 to Friday, 30 June 2006, both days inclusive.
Annual General Meeting
The company"s 60th annual general meeting will be held in the Boardroom, Altech
Corporate Offices, 79 Central Street, Houghton, Johannesburg on Friday, 14 July
2006 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 2006.
On behalf of the board
Dr Bill Venter Robert Venter Diane Radley
Chairman Chief Executive Chief Financial
Officer
8 May 2006
Corporate information
Directors
Dr WP Venter (Chairman), RE Venter (Chief Executive), MC Berzack, N Claussen,
PMO Curle*, MJ Lamberti, MJ Leeming, Dr PM Maduna, JRD Modise, DC Mpofu, DC
Radley, PD Redshaw*, Dr HA Serebro (alt DM Ramaphosa), CG Venter, PL Wilmot
*British
Secretaries
Altron Management Services (Pty) Limited
Mr AG Johnston
Group Company Secretary
Sponsor
Nedbank Capital
Date: 09/05/2006 08:00:32 AM Produced by the JSE SENS Department
