Altron shifts entire focus to Africa
JSE-listed tech firm Altron has announced it will demerge and separately list its UK business, Bytes UK, and centralise resources to be directed towards Africa, as the continent becomes its main focus.
The company issued a statement in which it explains the move will unlock value for shareholders, and that Bytes UK will be listed in the UK, with a secondary listing on the JSE. While Altron will remain listed on the JSE, it plans to demerge from its remaining investment in the UK.
Mike Leeming, Altron Board Chairperson, said the Board’s decision to separately list Bytes UK was made following a review of the new financial year strategy. “The Board assessed each of the business units within Altron to identify opportunities which have the potential to unlock further value for shareholders and streamline operations. The Board then concluded that the true value of Bytes UK, a wholly owned subsidiary of Altron, is not reflected in the Company’s share price. Through the demerger and separate listing of Bytes UK, we are looking to optimise the business and unlock additional value for shareholders.”
Altron Group Chief Executive, Mteto Nyati, said two years ago the company embarked on an Africa growth strategy with a conservative approach limited to seven countries where it had operations.
“Today we are operating in seven countries as Altron and in 21 countries through our partners. Now we are going to accelerate our Africa growth efforts by bolstering offerings where we have existing operations. In countries where we operate through partners we will be looking to establish operations. We will also prioritise countries where our multinational customers have presence so we can continue to support them there,” said Nyati.
Nyati added that the company will be guided by its multinational customers with presence in the rest of Africa, and aims to partner with them as they grow into the continent.
The overall strategy of the company will not change. “We will continue to focus on digital transformation underpinned by cloud, data analytics, internet of things and security.”
He said that through the One Altron strategy the Group had streamlined, focusing on its core capabilities of technology services and solutions by disposing non-core assets, rationalising operations and making high-growth acquisitions, which resulted in consistent double-digit EBITDA growth over the last three years.
“We achieved a total shareholder return of 26% per annum, and the return on capital employed increased from 6.3% to 20.8% over the same period.”
“We are now positioned to be a leading IT services company on the African continent following the successful execution of the strategy,” said Nyati.
“The potential demerger of Bytes UK marks a new era for Altron, which will now be focused in Africa, serving our more than 20,000 customers located on the continent. Any future geographic expansion will be from this solid African base.”
Nyati concluded “the Group will continue to focus on its chosen growth areas of cloud, data analytics, internet of things and security, while our recent acquisition of Ubusha and Altron Karabina will strengthen our capabilities in security, cloud service and data analytics.
The process is likely to take between nine to 12 months, depending on capital market conditions.
If financial markets have not corrected by then, Altron may decide to hold off on Bytes UK’s demerger and its separate listing.