For H126, Altron has seen the benefit of a diversified portfolio in a challenging market environment. The IT Services business has suffered from constrained IT budgets and price pressure, with an operating loss expected for Altron Digital Business (ADB). The Platforms business conversely saw double-digit revenue growth and strong growth in EBITDA, and a change in depreciation policy in Netstar further boosted operating profit. We have revised our forecasts to reflect a weaker outlook for ADB, a better performance for Altron Fintech and Altron Security, and a longer depreciation period for Netstar devices, driving upgrades to continuing HEPS of 10.3% in FY26 and 9.5% in FY27.

Altron reported EBITDA and operating profit before capital items and headline EPS well ahead of our forecasts for FY25. In the Platforms division, the strength of the FinTech and HealthTech businesses more than offset a weaker H2 for Netstar. The IT Services division beat our operating profit forecast even though Altron Digital Business (ADB) had a disappointing year. Management maintains its medium-term operating margin targets. We have revised our forecasts to reflect the H225 performance, with Platforms remaining at or above the targets for FY26/27. Due to the difficult trading environment for ADB, we forecast a slower margin progression for the IT Services division, resulting in a small downgrade to our FY26 HEPS from continuing operations before a return to growth of 19% in FY27. The imminent management buyout of Nexus removes the last discontinued business, leaving management to focus on the core business.

Following on from its 24 February trading update for FY25, Altron has provided more specific guidance for its FY25 results. Headline and reported EPS from continuing operations as well as group headline EPS are well ahead of our forecasts. Reported group EPS is lower than we forecast, we estimate due to higher than expected losses from discontinued operations (now only the Nexus business). We maintain our forecasts pending full results on 26 May.