JSE-listed Allied Electronics Corporation (Altron) this morning reported a 26% increase in annual profit, from R596 million to R751 million.
Revenue for the year to February rose 14% to R13.97 billion (2005: R12.21 billion), while operating profit before capital items rose to R1.04 billion (R963 million), passing the R1 billion mark for the first time.
The group has declared a dividend of 78c, 24% higher than the 63c of the previous financial year.
"We are pleased with the overall performance by all our underlying operations," says CEO Robert Venter. "As a result we were able to improve our return on capital employed to 23% and our return on net assets to 27%. Our balance sheet remains strong with cash on hand of R2.2 billion, compared with R1.5 billion in the prior year."
Basic earnings per share rose 9% from 162c to 176c, while headline earnings per share (HEPS) were 17% up at 189c (162c).
Venter attributes the HEPS growth to better than expected performances from most of the group`s operating companies.
However, Altech NamITech experienced pricing pressures and management issues that had an adverse effect on profitability. Venter says a goodwill impairment of R82 million has been raised as a result of the underperformance and the closure of certain operations.
"The necessary corrective actions have been taken at Altech NamITech in terms of management changes, a business realignment and a restructuring exercise," he adds.
Altron`s net asset value per share rose from 963c to 1 040c, and the group had cash and cash equivalents of R2.15 billion (R1.52 billion) at the end of the period.
Venter expects further earnings growth in the new financial year.
"There are a number of positive factors in the sectors in which we operate, including the government`s commitment to increased investment in the country`s power generation, transmission and distribution capacity."
Other factors include Soccer World Cup-related infrastructure spending, strong conditions in the building construction sector, the conversion of the financial industry to the EMV chip card standard, telecoms deregulation, and an improving business environment in the IT sector.
The Altron share was untraded at 2 950c on the JSE by midmorning.
* ITWeb will be present at a results presentation scheduled for this afternoon.
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