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Johannesburg - Allied Technologies (Altech) has increased its annual profits despite difficult trading conditions.
Releasing results for the year to end-February on Tuesday, Altech group's revenues slightly beat that of the previous year at R9.2bn. Operating profit increased by 7% to R933m and adjusted headline earnings per share grew to 605c, from 592c, in 2009.
Said CEO Craig Venter: "I am pleased with the strong performance that has been delivered by the majority of Altech's operating companies. In particular Altech Netstar, Altech Stream East Africa, Altech Fleetcall and Altech Card Solutions performed well."
Altech also increased its dividends by 5% to 339c per share.
"Our Group operating margin increased to 10.1%, from 9.5% in 2009," added Venter. "Altech Stream East Africa has proven to be a sound investment and already contributes 20% of the Altech group's total operating profit."
In a statement the group said its robust performance could be attributed to an increase in airtime revenue, value added services and pre-paid voucher sales. It has also seen positive performance from new subsidiaries such as Altech Technology Concepts that was acquired in 2009.
"The three GSM Operators agreed to a reduction in the mobile termination rate from 1 March 2010. Further reductions to mobile retail tariffs are expected during the first six months of 2010, which could have an adverse impact on operating margins for the financial year ending February 2011. Actions to mitigate this impact have already been taken," it said.
Venter recently told Fin24.com that his company was aggressively tackling the telecommunications space in East Africa via subsidiary Kenya Data Networks (KDN) and partnerships with undersea cable projects such as Seacom and Teams.
The group said that KDN produced good results for the period under review, mostly attributable to strong growth in the East African ICT sector.
"This growth is expected to continue, supported by KDN's strengthened position as the infrastructure provider of choice in Kenya and its expanding network in the neighboring regions, notably Uganda and Rwanda," it said.
According to Venter a healthy portion of annuity income has also placed the group in a favorable position, and this focus will continue.
"Annuity revenue remained a strong focus, increasing to 82%, previously 79%, of total revenue, and providing stability for the Group in a slow recovering market," he said.
"Working capital management, stringent cost control and improved profit margins resulted in a robust balance sheet and our cash position remains strong at R616m despite a number of acquisitions made."
He said that cost containment and margins will remain a focus for the financial year ahead.
- Fin24.com
