Technology company Allied Technologies (Altech), part of the Altron group, is on an acquisition trail after reporting solid growth for the interim period to 31 August.
Commenting on Altech`s acquisition strategy, CEO Craig Venter says the group has been stringent in its requirements as to fit, risk and other criteria, which caused it to walk away from several acquisition prospects after due diligence processes.
"The result of this stringent approach and its refusal to make acquisitions for their own sake is that Altech is now almost uniquely positioned within the technology, media and telecoms [TMT] sector," he says.
"It is one of the few listed groups in this sector with substantial cash resources and neither gearing nor loss-making operations."
He says the plunge in TMT sector valuations has created the opportunity for acquisition activity in the near term. "In fact, a number of acquisition prospects which would have been well beyond the group`s price range even one year ago are now serious possibilities." Some of these prospects are at an advanced stage.
The group performed well during the six months to end-August, reporting a 20.1% increase in headline earnings per share (HEPS). On a continuing operations basis, HEPS rose almost 24%, from 105.5c to 130.7c.
The telecommunication division contributed 67.4% of revenue (67% the previous year). During the period the 40% stake in Alcatel Altech Telecoms was sold for R335 million.
In the wireless communications division, cellular telephony company Autopage Cellular performed ahead of expectations, increasing its subscriber base by 13 000 to more than 460 000.
Vehicle tracking and recovery company Netstar also performed well, increasing its base to more than 200 000 active units and its market share to 46%. It recovered 1 828 stolen and hijacked vehicles during the period.
UEC Technologies, part of the multimedia and electronics division, exceeded its turnover budget and profit before tax despite a difficult market. MediaVerge and Alcom Motorola also performed strongly.
In the IT division, software and systems integration company ISIS Information Systems performed well and is increasing its share of the export market. Keops Isis Industrial Information Systems has returned to profitability and has increased its customer base.
All of Altech card solutions divisions made significant contributions to a good six months. The EFTPOS terminal division has also done well and is expecting good growth in its sector.
"Continuing local and global economic uncertainty, exacerbated by the threat of armed conflict in the Gulf region, leaves little doubt that the coming months will be as tough, if not more so, than the period under review," Venter says.
"The Altech group remains positive, focused and acquisitive, and will maintain its healthy balance of successfully managing the basics and driving for continuous improvement."
Venter says similar growth can be expected for the remainder of the financial year. The group has declared a special dividend of 50c a share.
The Altech share rose 75c or 3.5% yesterday to close at 2 200c.
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