Centurion, 12 September 2016.
Local JSE AltX listed technology holding company, Alaris Holdings (Alaris), released their results today. The recent COJOT acquisition, a simplified business structure and streamlined operations is delivering robust financial performance. Previously known as Poynting Holdings, Alaris increased their revenue by 29% from R193.0 million in 2015 to R248.5 million in 2016.
- Revenue increased by 29% from R193.0m to R248.5m
- Normalised earnings increased from R20.0m to R48.8m
- Cash and cash equivalents increased by 27% from R74.4m to R94.5m
- COJOT acquisition concluded and consolidated from 1 May 2016
- Aucom earn-out period concluded 30 June 2016
The total profit for the Group was R21.5 million, compared to a loss of R5.1 million in the comparative period. “However, the financial results for both periods include items which are not representative of the performance of the underlying operations”. Says group CEO, Juergen Dresel.
Considering the slow start to the first half of the financial year, the underlying businesses performed well for the second half resulting in robust profit growth. The overall results were boosted by a net foreign exchange gain of R12.5 million, economy of scale and large orders for Asia and Africa that were received. “Management focused on improving the investment in net working capital during the year which resulted in cash flow from operating activities improving to R54.2 million (2015: outflow of R0.9 million)”. Dresel remarks
Other items include the COJOT acquisition that was concluded and consolidated from 1 May 2016. The numbers are consolidated for two months but the margin is not reflective of longer term margins. Based on Aucom achieving the cumulative three year earn-out target of R38 million the contingent consideration asset raised in 2015 was reversed at the end of June 2016.
Alaris Antennas, which designs and manufactures specialised broadband antennas as well as other related radio frequency products, continued to deliver good growth, with revenue increasing by 33% from R88.4 million to R117.3 million. Profit after tax (“PAT”) also increased by 62% from R20.9 million to R33.9 million. The improvement in the order book as well as the execution and delivery thereof is evident in the improvement in the second half results. In order to remain competitive in the global market, Alaris Antennas continues to be a leader in product innovation, adding 98 (2015: 155) new products to its portfolio in the financial year to support future top line growth. Further investment in productive and engineering headcount from 87 to 101 was necessary to execute on the order book
“These expansions support our strategy to deliver high quality products to our customers within the committed timelines” Dresel states.
Specialising in the design and implementation of integrated broadcasting systems, African Union Communications (Aucom), managed to deliver healthy growth on last year’s results with revenue increasing by 11% from R104.6 million to R116.4 million and PAT increasing by 155% from R7.3 million to R18.6 million. The net profit margin increased from 7% to 16% mainly from higher commissions received and an increase from R3.9 million to R9.8 million per annum for recurring monthly service level charges, which have a lower cost base. A significant contract in the Seychelles was secured in the first half of the year and a large portion of the deal was completed by the end of June 2016.
COJOT Oy, a Finnish based company with years of experience in the design, development and manufacture of innovative antenna products serving public safety and military markets globally, delivered a revenue of R14.8 million and PAT of R5.2 million. The numbers were consolidated for the two months to year end. These two months contributed a significantly higher profit margin than anticipated owing to a few larger orders being delivered in these months.
Alaris Antennas has consistently grown turnover and profits since its establishment in 2005. For Alaris Antennas, organic growth is stimulated and achieved through the continuous drive towards adding new and innovative products into their portfolio. “Our products are designed locally by our team of engineers and manufactured at our premises in Centurion. This makes us competitive in the global market, resulting in approximately 80% of our revenue from exports”. Dresel remarks.
The business is diversifying territories and entering into new market segments where the Company’s core competencies find application for further growth opportunities. Management believes the business has significant potential for organic growth and acquisitive growth where there is a complimentary opportunity in markets and products.
Considered a market leader, Aucom continues to bid for significant Digital Terrestrial Television and Transmission infrastructure opportunities across the African continent. Aucom was recently awarded a three year contract for Sentech Limited to supply, design, support and maintain the VSAT network system including the remote terminals. The business is well positioned to assist customers in complying with deadlines set by the International Telecommunication Union. Further increased returns are expected on the capital investment made this year on the service lab facility. The income stream from this facility has steadily increased in these past few months.
COJOT is a customer intimate business where new product development is centered around the customer’s needs. The business remains competitive and efficient because they have invested in partnership with contract manufacturers and a professional service provider network to enable sustainable growth.
“International expansion is an important part of the Group’s global strategy to improve our proximity to our clients and meet their needs. The current focus is to ensure the profitable organic growth of the Alaris Antennas, COJOT and Aucom businesses and further improve working capital management of the Group”. says Dresel and concludes.
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