Altron — Further margin expansion in H125

Altron (JSE: AEL)

Last close As at 03/12/2024

ZAR20.00

−0.15 (−0.74%)

Market capitalisation

ZAR8,228m

More on this equity

Research: TMT

Altron — Further margin expansion in H125

Altron reported a 105% y-o-y increase in operating profit before capital items in H125, with margin expansion of 5.1pp to 9.8%. The Platforms businesses were particularly strong, with Netstar and FinTech achieving material revenue and profit growth. Altron Digital Business, still in the integration phase, saw some non-recurring costs and the shift of several project starts into H225, but has seen indications that performance should improve in FY26. Management raised its FY26 operating profit target, partly to reflect the inclusion of Altron Document Solutions (ADS) in continuing operations. We have upgraded our forecasts for continuing operations and the group, partly reflecting better performance in the Platforms business and partly factoring in reduced losses from discontinued operations.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Altron

Further margin expansion in H125

H125 results

Software and comp services

22 November 2024

Price

ZAR20.0

Market cap

ZAR7,593m

Net debt (ZARm) at end H125

312

Shares in issue

380.0m

Free float

35.7%

Code

AEL

Primary exchange

JSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

4.5

13.5

97.0

Rel (local)

6.4

11.5

71.1

52-week high/low

ZAR20.5

ZAR9.35

Business description

Altron is a South African provider of platforms and IT services. The company operates via three divisions: IT Services, Platforms and Altron Arrow. In FY24, 89% of revenue was generated in South Africa and annuity revenue made up 60% of total revenue.

Next events

FY25 trading update

March 2025

Analyst

Katherine Thompson

+44 (0)20 3077 5700

Altron is a research client of Edison Investment Research Limited

Altron reported a 105% y-o-y increase in operating profit before capital items in H125, with margin expansion of 5.1pp to 9.8%. The Platforms businesses were particularly strong, with Netstar and FinTech achieving material revenue and profit growth. Altron Digital Business, still in the integration phase, saw some non-recurring costs and the shift of several project starts into H225, but has seen indications that performance should improve in FY26. Management raised its FY26 operating profit target, partly to reflect the inclusion of Altron Document Solutions (ADS) in continuing operations. We have upgraded our forecasts for continuing operations and the group, partly reflecting better performance in the Platforms business and partly factoring in reduced losses from discontinued operations.

Year end

Revenue* (ZARm)

PBT**
(ZARm)

Diluted EPS**
(ZAR)

HEPS*** (ZAR)

DPS
(ZAR)

P/E
(x)

Yield
(%)

02/23

8,445

482

0.88

0.85

0.35

22.7

1.8

02/24+

9,603

570

1.04

1.03

0.58

19.3

2.9

02/25e

9,770

821

1.45

1.45

0.70

13.8

3.5

02/26e

10,519

960

1.72

1.75

0.85

11.6

4.2

Note: *Continuing operations. **PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items, and are for continuing operations. ***Basic continuing headline EPS. +Restated to include ADS.

H125: Strong uplift in operating profit

In H125, reported operating profit from continuing operations grew 153% y-o-y, helped by a very strong performance from Netstar and FinTech in the Platforms division and a large improvement in profitability from the newly included ADS. Group HEPS increased from -ZAR0.65 to ZAR0.74, benefiting from continuing operations improvement and within discontinued operations, a material reduction in losses from Nexus. This supported a 60% uplift in the interim dividend to ZAR0.40.

Outlook: FY26 operating profit target raised

Management raised the FY26 continuing operations operating profit target from ZAR1.1bn to ZAR1.15bn, partly to reflect the inclusion of ADS in continuing operations. Our FY25 forecasts reflect stronger FinTech profitability partially offset by the weakness in Altron Digital Business. FY26 forecasts reflect stronger profitability for FinTech and Netstar, partially offset by a slightly weaker performance in IT Services. We reduce our forecasts for losses in Nexus in both years. Overall, this results in upgrades to continuing basic HEPS of 12.6% in FY25 and 10.5% in FY26 and to group HEPS of 26.8% in FY25 and 8.9% in FY26.

Valuation: Undervalued versus international peers

The stock has gained 80% since the FY24 results in May. We have updated our sum-of-the-parts valuation to reflect our revised forecasts. After a 30% holding company/South Africa discount, we arrive at a valuation of ZAR25/share, 25% above the current share price. In our view, evidence of continued progress towards the FY26 operating profit target, including a recovery in Altron Digital Business margins, and clarity over the Nexus discontinued business should drive share price upside.

Review of H125 results

We summarise Altron’s H125 results in Exhibit 1. Comparatives have been restated to include ADS in continuing operations. Revenue declined 1.7% y-o-y; excluding ATM revenues (the business was sold in H124), revenue increased 5.4% y-o-y. Annuity revenue, which made up 63% of the total, increased 12% y-o-y or 19% excluding ATM. EBITDA before capital items increased 49% y-o-y (or 53% excluding the ATM contribution), helped by strong growth in Netstar and FinTech and a return to profitability for ADS, and the EBITDA margin expanded 6.3pp to 18.6%. Operating profit before capital items increased 105% (116% excluding ATM) and the operating margin increased 5.1pp to 9.8%. This supported a 182% increase in HEPS for continuing operations. The loss from discontinued operations reduced significantly, taking group HEPS from -ZAR0.65 in H124 to ZAR0.74 in H125. Company adjusted net debt reduced 44% to ZAR312m. Adjusted to exclude back-to-back rental finance advances in ADS, Altron had a net cash position of ZAR93m at the end of H125, resulting in net debt/EBITDA of -0.06x. The company announced an interim dividend of ZAR0.4, up 60% y-o-y.

Exhibit 1: H125 results highlights

ZARm

H124

H125

y-o-y

Revenues

4,951

4,868

-2%

EBITDA

607

905

49%

EBITDA margin

12.3%

18.6%

6.3pp

Normalised operating profit

244

490

101%

Normalised operating margin

4.9%

10.1%

5.1pp

Operating profit before capital items

233

477

105%

Operating margin

4.7%

9.8%

5.1pp

Reported operating profit

181

458

153%

Reported operating margin

3.7%

9.4%

5.8pp

Normalised PBT

179

449

151%

Reported PBT

116

417

259%

Normalised net income - continuing operations

95

309

225%

Reported net income

(315)

276

-188%

Normalised basic EPS - continuing operations (ZAR)

0.25

0.81

224%

Normalised diluted EPS - continuing operations (ZAR)

0.25

0.79

218%

Headline basic EPS - continuing operations (ZAR)

0.28

0.79

182%

Headline basic EPS - discontinued operations (ZAR)

(0.93)

(0.05)

-95%

Headline basic EPS - group (ZAR)

(0.65)

0.74

-214%

Headline diluted EPS - continuing operations (ZAR)

0.28

0.77

179%

Headline diluted EPS - discontinued operations (ZAR)

(0.92)

(0.05)

-95%

Headline diluted EPS - group (ZAR)

(0.64)

0.72

-212%

Reported basic EPS (ZAR)

(0.87)

0.70

-180%

Reported basic EPS – continuing operations (ZAR)

0.15

0.75

401%

Dividend per share (ZAR)

0.25

0.40

60%

Net debt - as reported

541

200

-63%

Net debt - company adjusted*

558

312

-44%

Source: Altron, Edison Investment Research. Note: *Excludes net cash in discontinued operations and cash held for merchants.

Divisional performance

Exhibits 2 and 3 below show performance by business line in H125. As announced in July, the company has brought ADS back into continuing operations within IT Services; H124 results have been restated accordingly.

Exhibit 2: Revenue by division, H125 – continuing operations

ZARm

H124

H125

y-o-y

IT Services

Altron Digital Business

1,879

1,619

-13.8%

Altron Security

281

247

-12.1%

Altron Document Solutions

659

731

10.9%

2,819

2,597

-7.9%

Own Platforms

Netstar

1,019

1,135

11.4%

FinTech

552

607

10.0%

HealthTech

190

201

5.8%

1,761

1,943

10.3%

Distribution

Altron Arrow

424

376

-11.3%

Corporate/consolidation

(53)

(48)

-9.4%

Total revenue

4,951

4,868

-1.7%

Total adjusted revenue

4,618

4,868

5.4%

Source: Altron. Note: Adjusted revenue excludes ATM revenue of ZAR333m in H124.

Exhibit 3: H125 EBITDA and operating profit - continuing operations

ZARm

H124

H125

y-o-y

H124

H125

y-o-y

EBITDA before capital items

EBITDA margin

IT Services

Altron Digital Business

96

47

-51.0%

5.1%

2.9%

-2.2pp

Altron Security

80

80

0.0%

28.5%

32.4%

3.9pp

Altron Document Solutions

(123)

30

124.4%

-18.7%

4.1%

22.8pp

53

157

196.2%

1.9%

6.0%

4.2pp

Own Platforms

Netstar

364

489

34.3%

35.7%

43.1%

7.3pp

FinTech

151

232

53.6%

27.4%

38.2%

10.9pp

HealthTech

53

55

3.8%

27.9%

27.4%

-0.5pp

568

776

36.6%

32.3%

39.9%

7.7pp

Distribution

Altron Arrow

38

35

-6.7%

9.0%

9.3%

0.3pp

Corporate/consolidation

(52)

(63)

21.2%

N/A

N/A

Total EBITDA

607

905

49.1%

12.3%

18.6%

6.3pp

Total adjusted EBITDA

590

905

53.4%

12.8%

18.6%

5.8pp

Operating profit before capital items

Operating margin

H124

H125

y-o-y

H124

H125

y-o-y

IT Services

Altron Digital Business

73

34

-53.4%

3.9%

2.1%

-1.8pp

Altron Security

65

66

1.5%

23.1%

26.7%

3.6pp

Altron Document Solutions

(135)

20

114.8%

-20.5%

2.7%

23.2pp

3

120

N/A

0.1%

4.6%

4.5pp

Own Platforms

Netstar

101

146

44.6%

9.9%

12.9%

3.0pp

FinTech

132

215

62.9%

23.9%

35.4%

11.5pp

HealthTech

50

54

8.0%

26.3%

26.9%

0.5pp

283

415

46.6%

16.1%

21.4%

5.3pp

Distribution

Altron Arrow

37

35

-5.4%

8.7%

9.2%

0.4pp

Corporate/consolidation

(90)

(93)

3.3%

N/A

N/A

Total operating profit

233

477

104.7%

4.7%

9.8%

5.1pp

Total adjusted operating profit

221

477

115.8%

4.8%

9.8%

5.0pp

Source: Altron. Note: Adjusted EBITDA and operating profit exclude the contribution from ATM in H124.

IT Services – mixed performance

Altron Digital Business – first time reporting as one entity

Altron Digital Business comprises the three businesses that were previously reported separately – Altron Managed Solutions, Altron Systems Integration and Altron Karabina. Since 1 March, the businesses have been combined to create one entity. As part of this process, the business has developed a unified sales strategy that has better price discipline and has incentives aligned to company objectives. In H125, the division incurred non-recurring costs of ZAR16m relating to low-margin contracts, two customers reduced their spend and three material projects were delayed (ZAR18m impact on EBITDA), although these have since started in H225. Revenue declined 14% y-o-y; once the ATM business is excluded, revenue increased 5% y-o-y, with annuity revenues making up 50% of the total. Excluding ATM, EBITDA declined 42% y-o-y, resulting in a 46% decline in operating profit with an operating margin of 2.1%. Despite the weaker-than-expected performance in H125, management pointed to several leading indicators that bode well for H225 and onwards. Upselling and cross-selling to the existing customer base have improved, there has been a 6% increase in new annuity contracts signed and an 87% increase in the annuity pipeline.

Altron Security – revenue mix masks underlying performance

Revenue declined 12% y-o-y while EBITDA was flat y-o-y. Operating profit grew 1.5% y-o-y and the margin increased 3.6pp to 26.7%. Management noted that one large customer reduced its capex plans. It also sold a higher proportion of net revenue accounted software (deemed sold on an agency rather than principal basis), which has the effect of reducing absolute revenues but increasing profit margins as it is recorded at a gross margin of 100%. At the FY24 results, the company noted that it had taken corrective action to protect gross margin and manage expenses; this also contributed to the margin expansion. Annuity revenues increased to 84% of revenue from 69% a year ago.

ADS – first-time inclusion

Revenue increased 10.9% y-o-y, helped by new customer wins and higher public sector contracting, and EBITDA improved from a loss of ZAR123m in H124 to positive ZAR30m in H125. This resulted in the operating margin increasing from -20.5% to 2.7% over the year. We would expect the decision to bring ADS back into continuing operations to help in the renewals process, giving existing customers comfort that they will continue to work with the same team and that ADS will continue to invest in the business.

Platforms – firing on all cylinders

Netstar – growing market share in consumer and enterprise

The business continued to make good progress in improving operational performance and growing revenue. Revenue was 11% higher year-on-year, helped by 21% growth in subscribers to nearly 1.9 million and 26% growth in connected devices to 2.4m. Churn of 17% was slightly higher than the 16% reported in FY24, but in line with guidance. The retention rate was above 90%, pre-fitment conversion was above 60% and contract fulfilment was above 90% (10 new fitment centre partnerships were signed). The business opened its new global fleet bureau in April which is already tracking more than 30,000 assets and recently launched FleetAI software, a fleet management system for corporate customers. The business recently won a contract with Orica, a provider of mining and infrastructure solutions, to provide a full managed service which includes AI cameras and asset management across Africa and Europe. EBITDA increased 34% y-o-y expanding the margin by 7.3pp to 43.1%. Reflecting the higher level of depreciation due to the growth in subscribers (tracking devices are depreciated over three years), operating profit increased 44.6% y-o-y and the operating margin increased 3.0pp to 12.9%. Annuity revenues increased to 90% from 87% a year ago. The business added new strategic partnerships, including 17 insurers and 16 motor dealers. Netstar estimates that it is gaining market share in South Africa. Future growth is focused on growing the enterprise side of the business, winning more fleet managed services contracts and expanding further outside of South Africa, particularly in Asia-Pacific where it is already active in Malaysia, Thailand and Australia.

Altron FinTech – debit volume growth

Revenue increased 10.0% y-o-y and EBITDA increased 53.6% y-o-y, resulting in margin expansion of 10.9pp to 38.2%. Operating profit increased 62.9% and the operating margin expanded 11.5pp to 35.4% helped by a higher margin annuity mix (82% versus 69% in H124) and a 5% reduction in operating expenses. The main growth driver was a 33% increase in collections and payments revenue, helped by a 17% increase in the customer base and an 18% increase in the value of debit orders processed after a period of focus on SME customers. The business continued to upsell value-added services such as strike date adoption.

Altron HealthTech – increasing focus on corporate customers

Revenue increased 6% y-o-y, EBITDA increased 4% and operating profit 8%. The operating margin increased 0.5pp to 26.9%. The business signed up 504 net new practice management customers, with 1.7 customers added for every customer churned, although revenue from practice management was flat y-o-y. The business added seven new corporate customers, driving corporate revenue up 22% y-o-y. The business expensed ZAR15m of platform investment (vs ZAR5m a year ago). It is focused on building its data business, providing AI-driven data insights and in H125, 18 new practices signed up for HealthTech’s oncology solution. Annuity revenues remained high at 92% of divisional revenue.

Altron Arrow – profitability maintained despite tough market

The joint venture saw a previously flagged revenue decline of 11.3%, reflecting a cyclical downturn in the industry. However, EBITDA was down by only 6.7% and operating profit by 5.4%, resulting in operating margin expansion of 0.4pp to 9.2%.

Discontinued operations – losses reduced significantly

With ADS now back in continuing operations, Altron Nexus is the only business included in discontinued operations. In H125, it generated revenue of ZAR236m (-49% y-o-y), LBITDA of ZAR14m and an operating loss of ZAR14m. In total, discontinued operations contributed a net loss of ZAR22m, greatly reduced from ZAR385m in H124.

Outlook and changes to forecasts

Management has updated its medium-term outlook, partly to reflect the inclusion of ADS in continuing operations (see Exhibit 4), taking its FY26 operating profit target from ZAR1.1bn to ZAR1.15bn. Post the election and creation of the government of national unity, the company has not yet seen a noticeable uptick in customer demand but sees opportunity if the digitisation agenda is followed. Management is focused on controlling what it can and providing continuity for its customers.

Exhibit 4: Management guidance

Source: Altron

At a business line level, management aims to maintain Altron HealthTech, Altron FinTech and Altron Security margins at current levels, while targeting Netstar margins of 16%. Within IT Services, the company is targeting operating margins of 6–8% for Altron Digital Business and c 7% for the whole division. As there is a global ongoing correction in demand in Altron Arrow’s market, we are forecasting a revenue decline in FY25 but management is aiming to maintain the operating margin.

We have revised our forecasts to reflect H125 results and to include ADS in continuing operations. For FY25, we have increased our operating profit before capital items forecast by 7.6%, reflecting better profitability from the FinTech business and the inclusion of ADS, partially offset by weaker profitability in Altron Digital Business. For FY26, we have increased our operating profit before capital items forecast by 9.5%, reflecting better profitability from Netstar and FinTech and the inclusion of ADS, partially offset by weaker profitability in Altron Security. We are forecasting operating profit before capital items of ZAR1.06bn in FY26, slightly below management’s target. We have reduced our expectations for losses in Nexus, the remaining business in discontinued operations. This results in HEPS from continuing operations increasing by 12.6% in FY25 and 10.5% in FY26 and group HEPS increasing by 26.8% in FY25 and 8.9% in FY26. With the dividend payout policy set at 50% of HEPS from continuing operations, this also drives up our dividend forecasts.

Exhibit 5: Changes to forecasts

FY25e

FY26e

ZARbn

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

8,403.6

9,770.5

16.3%

1.7%

9,075.9

10,518.9

15.9%

7.7%

EBITDA

1,710.6

1,782.5

4.2%

24.0%

1,971.9

2,065.9

4.8%

15.9%

EBITDA margin

20.4%

18.2%

-2.1%

3.3%

21.7%

19.6%

-2.1%

1.4%

Normalised operating profit

844.8

903.1

6.9%

33.2%

986.7

1,068.0

8.2%

18.3%

Normalised operating margin

10.1%

9.2%

-0.8%

2.2%

10.9%

10.2%

-0.7%

0.9%

Reported operating profit

802.8

849.1

5.8%

37.8%

954.7

1,031.0

8.0%

21.4%

Reported operating margin

9.6%

8.7%

-0.9%

2.3%

10.5%

9.8%

-0.7%

1.1%

Normalised PBT

724.8

821.1

13.3%

44.1%

870.7

960.0

10.3%

16.9%

Reported PBT

682.8

767.1

12.3%

51.0%

838.7

923.0

10.0%

20.3%

Normalised net income – continuing operations

508.4

568.2

11.8%

41.3%

611.5

673.3

10.1%

18.5%

Reported net income

336.4

423.3

25.8%

-349.0%

489.5

531.0

8.5%

25.4%

Normalised basic EPS – continuing operations (ZAR)

1.34

1.50

11.8%

41.2%

1.61

1.78

10.1%

18.5%

Normalised diluted EPS – continuing operations (ZAR)

1.31

1.45

10.9%

40.2%

1.57

1.72

9.3%

18.5%

Headline basic EPS – continuing operations (ZAR)

1.29

1.45

12.6%

40.4%

1.59

1.75

10.5%

20.9%

Headline basic EPS – discontinued operations (ZAR)

(0.35)

(0.26)

-25.1%

-80.1%

(0.24)

(0.29)

19.4%

11.3%

Headline basic EPS – group (ZAR)

0.94

1.19

26.8%

-516.1%

1.34

1.46

8.9%

23.0%

Headline diluted EPS – continuing operations (ZAR)

1.25

1.40

11.8%

39.3%

1.55

1.70

9.7%

20.9%

Headline diluted EPS – discontinued operations (ZAR)

(0.34)

(0.25)

-25.6%

-80.2%

(0.24)

(0.28)

18.5%

11.3%

Headline diluted EPS – group (ZAR)

0.91

1.15

25.8%

-513.1%

1.31

1.41

8.1%

23.0%

Reported basic EPS (ZAR)

0.89

1.12

25.8%

-348.9%

1.29

1.40

8.5%

25.4%

Dividend per share (ZAR)

0.63

0.70

11.8%

20.8%

0.77

0.85

9.7%

20.9%

Net debt – group

552.5

488.1

-11.6%

56.0%

634.1

534.5

-15.7%

9.5%

Net debt – company adjusted

41.5

392.1

845.3%

80.7%

123.1

438.5

256.2%

11.8%

Source: Edison Investment Research

Exhibit 6: Financial summary

ZAR m

2019

2020

2021

2022

2023

2024

2025e

2026e

28-February

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

15,723.0

7,383.0

7,505.0

7,930.0

8,445.0

9,603.0

9,770.5

10,518.9

Costs

(14,116.0)

(6,283.0)

(6,472.0)

(6,790.0)

(7,194.0)

(8,166.0)

(7,988.0)

(8,453.0)

EBITDA

 

 

1,607.0

1,100.0

1,033.0

1,140.0

1,251.0

1,437.0

1,782.5

2,065.9

Normalised operating profit

 

 

1,041.0

456.0

371.0

518.0

621.0

678.0

903.1

1,068.0

Amortisation of acquired intangibles

0.0

0.0

0.0

(20.0)

(22.0)

(27.0)

(27.0)

(17.0)

Exceptionals/capital items

(26.0)

1.0

(23.0)

(213.0)

(59.0)

(35.0)

(27.0)

(20.0)

Reported operating profit

1,015.0

457.0

348.0

285.0

540.0

616.0

849.1

1,031.0

Net Interest

(176.0)

(255.0)

(179.0)

(146.0)

(142.0)

(110.0)

(82.0)

(108.0)

Joint ventures & associates (post tax)

(1.0)

(30.0)

(41.0)

3.0

3.0

2.0

0.0

0.0

Profit Before Tax (norm)

 

 

864.0

171.0

151.0

375.0

482.0

570.0

821.1

960.0

Profit Before Tax (reported)

 

 

838.0

172.0

128.0

142.0

401.0

508.0

767.1

923.0

Reported tax

(158.0)

(50.0)

(34.0)

(63.0)

(105.0)

(121.0)

(213.5)

(249.2)

Profit After Tax (norm)

701.1

121.3

110.9

208.6

355.8

425.2

592.5

698.1

Profit After Tax (reported)

680.0

122.0

94.0

79.0

296.0

387.0

553.6

673.8

Minority interests

(39.0)

20.0

12.0

(9.0)

(17.0)

(23.0)

(24.3)

(24.8)

Discontinued operations

70.0

506.0

12,048.0

(174.0)

(283.0)

(534.0)

(106.0)

(118.0)

Net income (normalised)

662.1

141.3

122.9

199.6

338.8

402.2

568.2

673.3

Net income (reported)

711.0

648.0

12,154.0

(104.0)

(4.0)

(170.0)

423.3

531.0

Basic ave. number of shares outstanding (m)

371.0

371.2

371.6

371.9

377.3

378.6

378.7

378.7

EPS - diluted normalised (ZAR)

 

 

1.77

0.38

0.33

0.53

0.88

1.04

1.45

1.72

EPS - basic reported (ZAR)

 

 

1.92

1.75

32.70

(0.28)

(0.01)

(0.45)

1.12

1.40

EPS headline basic (ZAR)

 

 

1.91

1.73

1.35

0.37

0.29

(0.29)

1.19

1.46

Dividend (ZAR)

0.44

0.55

1.44

0.30

0.35

0.58

0.70

0.85

Revenue growth (%)

-53.0%

1.7%

5.7%

6.5%

13.7%

1.7%

7.7%

EBITDA Margin (%)

10.2%

14.9%

13.8%

14.4%

14.8%

15.0%

18.2%

19.6%

Normalised Operating Margin

6.6%

6.2%

4.9%

6.5%

7.4%

7.1%

9.2%

10.2%

BALANCE SHEET

Fixed Assets

 

 

4,171.0

4,550.0

3,793.0

3,965.0

4,013.0

4,561.0

4,807.0

5,023.7

Intangible Assets

2,048.0

2,159.0

1,623.0

1,918.0

2,105.0

2,258.0

2,394.9

2,516.0

Tangible Assets

1,109.0

1,655.0

1,719.0

1,476.0

1,346.0

1,575.0

1,684.1

1,779.7

Investments & other

1,014.0

736.0

451.0

571.0

562.0

728.0

728.0

728.0

Current Assets

 

 

7,430.0

9,063.0

6,592.0

5,404.0

5,649.0

4,802.0

4,671.6

4,841.7

Stocks

1,017.0

1,252.0

833.0

972.0

1,023.0

971.0

952.2

996.4

Debtors

4,725.0

5,726.0

2,497.0

1,961.0

2,055.0

2,185.0

2,248.5

2,420.8

Cash & cash equivalents

1,381.0

1,810.0

1,454.0

757.0

740.0

1,140.0

964.9

918.5

Other (including assets held for sale)

307.0

275.0

1,808.0

1,714.0

1,831.0

506.0

506.0

506.0

Current Liabilities

 

 

(6,804.0)

(7,360.0)

(3,753.0)

(2,917.0)

(3,274.0)

(3,331.0)

(3,251.5)

(3,331.0)

Creditors

(5,026.0)

(5,705.0)

(2,319.0)

(1,853.0)

(1,964.0)

(2,321.0)

(2,241.5)

(2,321.0)

Tax and social security

(80.0)

(110.0)

(28.0)

(77.0)

(103.0)

(127.0)

(127.0)

(127.0)

Short term borrowings

(1,665.0)

(1,347.0)

(710.0)

(244.0)

(62.0)

(708.0)

(708.0)

(708.0)

Lease liabilities

0.0

(181.0)

(108.0)

(117.0)

(111.0)

(85.0)

(85.0)

(85.0)

Other (including liabilities held for sale)

(33.0)

(17.0)

(588.0)

(626.0)

(1,034.0)

(90.0)

(90.0)

(90.0)

Long Term Liabilities

 

 

(1,424.0)

(2,502.0)

(1,766.0)

(2,098.0)

(2,088.0)

(1,955.0)

(1,955.0)

(1,955.0)

Long term borrowings

(1,262.0)

(1,707.0)

(602.0)

(854.0)

(851.0)

(649.0)

(649.0)

(649.0)

Lease liabilities

0.0

(391.0)

(971.0)

(896.0)

(788.0)

(741.0)

(741.0)

(741.0)

Other long term liabilities

(162.0)

(404.0)

(193.0)

(348.0)

(449.0)

(565.0)

(565.0)

(565.0)

Net Assets

 

 

3,373.0

3,751.0

4,866.0

4,354.0

4,300.0

4,077.0

4,272.1

4,579.3

CASH FLOW

Op Cash Flow before WC and tax

1,095.0

1,084.0

968.0

440.0

346.0

188.0

787.1

951.0

Working capital

(406.0)

(254.0)

393.0

(44.0)

194.0

579.0

(124.2)

(136.9)

Exceptional & other

656.0

865.0

859.0

672.0

755.0

845.0

578.3

669.8

Tax

(147.0)

(169.0)

(226.0)

(94.0)

(50.0)

(131.0)

(223.5)

(259.2)

Net operating cash flow

 

 

1,198.0

1,526.0

1,994.0

974.0

1,245.0

1,481.0

1,017.7

1,224.6

Capex

(283.0)

(258.0)

(484.0)

(396.0)

(473.0)

(567.0)

(603.4)

(646.4)

Acquisitions/disposals

81.0

184.0

309.0

(76.0)

(76.0)

27.0

0.0

0.0

Net interest

(196.0)

(231.0)

(165.0)

(127.0)

(127.0)

(104.0)

(80.0)

(106.0)

Equity financing

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Dividends

(111.0)

(274.0)

(220.0)

(442.0)

(152.0)

(170.0)

(276.5)

(274.6)

Other

(438.0)

(648.0)

(432.0)

(408.0)

(361.0)

(304.0)

(265.0)

(265.0)

Net Cash Flow

251.0

299.0

1,002.0

(475.0)

56.0

363.0

(207.1)

(67.3)

Opening net debt/(cash)

 

 

2,033.0

1,623.0

1,336.0

453.0

811.0

563.0

312.0

487.1

FX

27.0

24.0

29.0

(3.0)

11.0

(6.0)

32.0

21.0

Other non-cash movements

132.0

(36.0)

(148.0)

120.0

181.0

(106.0)

0.0

0.0

Closing net debt/(cash) - company adjusted

 

1,623.0

1,336.0

453.0

811.0

563.0

312.0

487.1

533.5

Closing net debt/(cash) - as reported

 

1,546.0

1,244.0

(142.0)

341.0

173.0

217.0

392.1

438.5

Source: Altron accounts, Edison Investment Research. Note: *Excludes net cash in discontinued operations and cash held for merchants.

General disclaimer and copyright

This report has been commissioned by Altron and prepared and issued by Edison, in consideration of a fee payable by Altron. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

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Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Altron and prepared and issued by Edison, in consideration of a fee payable by Altron. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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