Altron set for earnings surge

IT services company Altron expects a big boost in earnings when it releases its half-year results for the six months through August 2024.

In a trading statement released on 31 July, the company informed shareholders that its earnings per share (EPS) and headline earnings per share (HEPS) are expected to be at least 20% higher compared to the prior period.

“The successful implementation of the profit improvement strategies and target operating models in Altron’s continuing operations and Altron Document Solutions resulted in an improved performance in the second half of the 2024 financial year,” the company said. 

It said this positive momentum has continued into the 2025 financial year, leading to a stronger year-to-date performance in comparison to the previous year, which was negatively impacted by provisions and impairments raised.

In particular, Altron said its Own Platforms segment has delivered a strong year-to-date performance, with Altron FinTech, Altron HealthTech, and Netstar growing revenue and notable growth in EBITDA and operating profit.

Within the IT Services segment, Altron Digital Business has delivered year-to-date revenue growth in line with the market as the company starts to see the early benefits of the new sales operating model taking effect.

However, EBITDA and operating profit are anticipated to be softer due to non-recurring project

expenses relating to historic contracts, which have now been closed and some project delays. 

Altron Security’s performance benefited from the corrective actions taken in H2 FY24, with the expectation of modest growth in EBITDA and operating profit.

Altron Arrow – the company’s Electronic Components business – is targeting to maintain its operating profit margin for FY25. 

However, revenue is anticipated to be softer due to the cyclical global slowdown in electrical component distribution.

In the comparative period, both Altron Document Solutions and Altron Nexus were restructured, and the management teams strengthened. 

Profit improvement strategies were implemented to improve cash flow generation and return these businesses to profitability. Active disposal processes were run for both businesses.

A strategic evaluation of all options for Altron Document Solutions, including an assessment of the offers received, was conducted. 

“These offers were below the Altron Board’s assessment of fundamental value and carried execution risk,” the company explained. 

“As a result, the Altron Board has concluded that retaining Altron Document Solutions within the group is the most effective option to maximise value for shareholders.” 

“Consequently, Altron Document Solutions will no longer be classified as held for sale and will be included in continuing operations within the IT Services segment in the reporting period.” 

The company said that, despite historically being held for sale, Altron Document Solutions remains an attractive business. 

“It is supported by a robust customer base and long-term contracts that generate sizeable annuity revenue, with strong support from its partner Xerox Limited.”

It said the successful execution of Altron Document Solutions’ profit improvement strategy has continued into FY25, resulting in year-to-date growth in revenue, EBITDA and operating profit.

Altron is expected to release its financial results on or about 4 November 2024.