Last close As at 05/08/2026
ZAR28.10
▲ 0.23 (0.83%)
Market capitalisation
ZAR11,853m
Research: TMT
In its pre-close operational update, Altron provided more detail on year-to-date performance (11 months to 31 January 2026), confirming that EBITDA from continuing operations grew in the mid-teens and operating profit grew more than 20% compared to the same period in FY25. We estimate that better profitability in Altron FinTech, Altron HealthTech and Altron Document Solutions are the main drivers of upside. We have upgraded our forecasts to reflect the stronger than expected performance so far in H226, lifting continuing headline EPS (HEPS) by 18.5% in FY26 and 7.3% in FY27.
| Year end | Revenue (ZARm) | PBT (ZARm) | EPS (ZAR) | HEPS (ZAR) | DPS (ZAR) | P/E (x) | Yield (%) |
|---|---|---|---|---|---|---|---|
| 2/24 | 9,603.0 | 570.0 | 1.04 | 1.03 | 0.58 | 20.8 | 2.7 |
| 2/25 | 9,588.0 | 912.0 | 1.83 | 1.78 | 0.90 | 11.7 | 4.2 |
| 2/26e | 9,645.4 | 1,141.6 | 2.28 | 2.31 | 1.12 | 9.4 | 5.2 |
| 2/27e | 10,249.1 | 1,232.4 | 2.31 | 2.38 | 1.15 | 9.3 | 5.4 |
Within the Platforms division, we estimate that Altron FinTech is the main source of upside, generating year-to-date (ytd) revenue growth in the high-teens, which in turn has generated EBITDA and operating growth in the high-20s percent range. In the IT Services division, Altron Digital Business (ADB) has completed its restructuring process and generated a profit in both December 2025 and January 2026. Altron Document Solutions’ (ADS’s) focus on profitability has generated better margins than we had forecast.
To reflect better profitability in Altron FinTech, Altron HealthTech and ADS, we have upgraded our EBITDA forecasts by 5.7% for FY26 and 3.9% for FY27. This flows through to operating profit upgrades of 9.8% in FY26 and 7.5% in FY27 and continuing HEPS upgrades of 18.5% in FY26 (also helped by a 5pp cut in the expected tax rate) and 7.3% in FY27.
The weakness in ADB has weighed on the stock price over the last six months, but the recent trading update showing that Platform strength was more than outweighing softness in IT Services has boosted it from its low of ZAR16.8 in November. Using a sum-of-the-parts valuation on our revised forecasts and after a 30% holding company/South Africa discount, we arrive at a valuation of ZAR25.9 per share (up from ZAR25.6), 20% above the current share price. In our view, evidence of continued progress towards medium-term operating margin targets, including a recovery in ADB revenue and margins, would be the key driver of share price upside. As well as FY26 results scheduled for 25 May, the company is planning a capital markets day in June to outline the next phase of growth.
Altron published a trading update on 12 February confirming that FY26 continuing HEPS and EPS would be at least 30% higher year-on-year. On 24 February the company published an operational update discussing performance year-to-date (for the 11 months to 31 January 2026).
Continuing operations saw a stronger performance in H226 to date than in H126 and this trend is expected to continue for the final month of FY26. Continuing operations delivered low double-digit EBITDA growth ytd and operating profit growth of more than 20%. Excluding the impact of the Netstar depreciation policy (where the useful economic life of capital rental devices was extended from three to five years from 1 March 2025), operating profit increased in the low-to-mid-teens. In the year-to-date, Platforms has contributed c 45% of revenue and c 90% of EBITDA and operating profit.
Overall, the Platforms segment saw double-digit revenue growth ytd:
We have revised our forecasts to reflect the following:
We have reduced our tax rate assumption from 25% to 20% for FY26, reflecting the last year that the company is able to use carried forward tax losses. We maintain our 25% forecast for FY27. We have nearly doubled our forecast for write-off of capital items in FY26, to explain the difference between HEPS and EPS.
Overall, we upgrade EBITDA by 5.7% in FY26 and 3.9% in FY27 and operating profit before capital items by 9.8% in FY26 and 7.5% in FY27. This results in upgrades to continuing HEPS of 18.5% in FY26 and 7.3% in FY27.
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AVI Global Trust (AGT) has been managed by Joe Bauernfreund at Asset Value Investors (AVI) since September 2015. During his tenure, the trust’s NAV has compounded at an annual rate of 11.6%. He invests in companies that own high-quality assets and are trading at a considerable discount to their estimated intrinsic values; there must be an identifiable catalyst for a discount to meaningfully narrow or close completely. AGT’s returns are derived from both discounts narrowing and NAV growth. The trust is very different from its nine peers in the AIC Global sector. Bauernfreund is benchmark agnostic and very confident about AGT’s portfolio due to the strong operational performances of investee companies and wide discounts. Global investors are becoming more discerning regarding valuation and are seeking opportunities outside the US, which until 2025 had been the favoured market for many years. This is an environment that plays into AGT’s strengths and the manager is finding a wealth of attractive opportunities.