Altron`s board has decided against a special distribution of some of the R2.2 billion cash on its books, says CEO Robert Venter.
Asked yesterday whether Altron would consider a special distribution to shareholders of some of the R2.2 billion cash it held at the end of the financial year, Venter said the Altron board had discussed the matter on Monday and had decided against it.
Venter was speaking at the presentation of Altron`s results for the year to February.
"The board looked at our internal requirements around capex [capital expenditure] and there was a recognition that we will spend more than in the past in order to expand capacity," he said.
"There is also the possibility of an acquisition at Altech level, and Altech is under cautionary at the moment, so I can`t comment more on that.
"Also, you need to take the preference dividend settlement off the cash balance as this was settled in March, which was after the year-end," he added.
Altron settled its R200 million preference share obligation with Nedbank on 2 March.
However, Altron declared a 24% higher dividend of 78c a share.
CFO Diane Radley said Altron did not have a fixed dividend policy. "We act as a conduit at Altron level and generally pass on to our shareholders what we receive from our subsidiaries," she said, adding that the board is also guided by market performances.
Powertech`s future
Yesterday was also the first time the market saw figures from Altron subsidiary Powertech, the only one of the group`s three subsidiaries not to have a separate JSE listing.
Commenting on the outlook for Powertech over the next five years, Venter said public infrastructure spending was expected to have a significant positive impact on the subsidiary, with spending by Eskom alone seen to contribute up to R1.8 billion a year to Powertech`s revenue.
Venter said this was a reasonable expectation if Powertech maintained its current market share as Eskom implemented plans to upgrade infrastructure over the next five years.
"Infrastructure spend is gaining traction," Venter said. "We can see that in Powertech`s figures."
Powertech`s revenue rose 19% from R3.74 billion to R4.47 billion in the year to February, accounting for about 32% of Altron`s revenue.
It lifted operating income to R280 million from R245 million, with the operating margin slipping from 6.6% to 6.3%.
Powertech CEO Norbert Claussen said if the first-half losses at Aberdare Telecoms were excluded, as Aberdare Telecoms has been closed down, the operating margin would be 6.8%.
Venter said Powertech has, through its products, good exposure to each part of the power continuum, from generation to transmission, distribution and reticulation, and should benefit significantly from Eskom`s capital expenditure plans.
However, public infrastructure spend is just one of the key growth drivers for the group as a whole, Venter noted.
Other key areas over the next five years include deregulation of the telecoms industry, which is expected to have positive benefits for both Altech and Bytes Technology Group (BTG), while a rapidly growing mobile telecoms market in Africa is expected to benefit Altech and Powertech.
Altech and BTG will benefit from the conversion of the financial services industry to the EMV chip card standard, while BTG is expected to benefit from an integrated IT offering.
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