Johannesburg - Telecoms and technology group Allied Technologies (Altech) on Tuesday reported a 12% rise in diluted headline earnings per share to 281 cents for the six months ended August 2009 from 251 cents a year ago. Adjusted headline earnings per share were up 13% to 304 cents.
Revenue was 4% higher at R4.73bn, while operating profit grew 17% to R479m.
The group said the strong balance sheet underpins its expansion strategy, with notable progress in several areas during the half-year, particularly in Africa, as detailed under group highlights.
Altech said its current major priority growth area is within the East African telecommunications sector. Significant focus has been given to its East African subsidiaries, particularly in terms of capital injection for the roll- out of additional fibre and obtaining access to undersea cable bandwidth.
Altech's subsidiary Kenya Data Networks (KDN) is the leading data network infrastructure operator in Kenya, with a nationwide fibre optic network. It is extending its coverage to neighbouring landlocked states, such as Uganda and Rwanda, and it is ideally positioned to link the new undersea cables landing at Mombasa, Kenya, to these and other states in the interior of East and Central Africa.
KDN has an extensive roll-out plan over the next few years in order to capitalise on the explosive growth opportunity offered by the expansion of data carrier demand in the region.
Altech has increased its economic stake in KDN by investing a further $39.5m into the company. The capital injection will be used to roll out the KDN network, further establishing KDN as the key provider of broadband in East Africa.
In addition, Altech has acquired a further 1.8% (voting) equity holding share in KDN from a KDN minority shareholder, for approximately $3.3m. Fifty percent of the shares will be paid for in cash over two years on the achievement of profit targets.
The remaining 50% will be paid in Altech shares which are subject to a phased release process over three years. The combination of this transaction and the equity injection referred to above has increased Altech's economic interest in KDN from 51% to 60.8%.
Looking ahead, Altech said its acquisitions, during the latter part of the last financial year and the first half of this financial year, are all performing well, and individually and collectively promise to add significantly to its future trading performance.
Bandwidth alliance
Its investment into East Africa has proven to be a resounding success and will undoubtedly be one of the future growth engines of the Altech group. Furthermore, its strategic alliance with Seacom and Teams for marine bandwidth, place the Altech group in an extremely positive position, which bodes well for the future.
"Our focus on expense reduction has placed us in an enviable position, has assisted in bolstering our performance, and has contributed positively to our Operating Margins. This will continue to support our drive for superior long- term group financial performance. Our efforts to build special relationships, with customers and staff, have paid early dividends and will help to drive our results positively in the future," it said.
With a strong order book and growing annuity revenue, the growth in East Africa, the liberalisation and deregulation of the telecommunications sector, Altech is well positioned for continued growth in its businesses for the remainder of the financial year, it concluded.
- I-Net Bridge