Altron, Altech, Bytes renew cautionaries

Johannesburg, 25 Sep 2007

Allied Electronics (Altron), Allied Technologies (Altech) and Bytes Technology Group have simultaneously renewed the cautionary notices posted in August.

In separate statements, issued within seconds of each other, the companies say preliminary discussions are still ongoing. Further information is not provided.

However, one analyst, who does not want to be named, has poured cold water on speculation that Bytes may be looking to its parent and sister company for funds to acquire Business Connexion.

"The deal just isn't big enough to warrant the three companies putting out cautionaries. Also, Business Connexion has not issued a cautionary to the market to indicate that it is in talks," he explains.

A more likely scenario is Altron continuing its strategy to consolidate its subsidiaries, he says.

"The Venter family has been working on reducing its listed subsidiaries for some time now. A few years ago it had nine subsidiaries, today it has only two: Bytes and Altron. Although Altron still has majority shareholdings in these businesses, it would be easier for them to drive strategy and leverage synergies if they were housed under one roof."

Going up

Altron also advised shareholders that it expects headline earnings per share (HEPS) for the half year ended 31 August to be between 35% and 40% higher than that of the previous year. This was primarily due to a strong performance from Powertech in the first half of the year, it said.

However, it noted Altech and Bytes had also achieved solid growth during the first half of the year with their HEPS, which Altron assumed to be between 8% and 13% higher year-on-year.

Altron added it expected basic earnings per share (EPS) for the interim reporting period to be between 26% and 31% higher. This was lower than the HEPS growth due to the impact of impairment losses at one of the Altron group operations.

Altron's interim financial results for the financial half year ended 31 August are expected to be announced on or about 9 October. Altech is expected to release its interim financials on or around 27 September. Bytes' half year results are expected on or around 3 October.