Altech benefits from Telkom's ambitious plans
IF there is one corporate winner of Telkom's ambitious vision to double SA's telephone network it must be Altech, the electronics and telecoms company in the Altron stable.
Already revitalised after a year of rationalisation and restructuring, Altech stands to benefit significantly from Telkom's R32-billion Vision 2000 plan.
Altech's telecommunications operation Alcatel Altech Telecoms (AAT) secured a R1.3-billion wireless local loop telephone contract, which has boosted its order book for this financial year to around R2.5-billion - already ahead of the previous year's sales of R2.1-billion.
There is more to come; AAT is well-positioned to capitalise on a portion of Vodacom's R2.5-billion expansion this year and is one of two short-listed groups for Telkom's R1-billion SDH (single digital hierarchy) contract, another part of the parastatal's telephone roll-out.
Chief executive Craig Venter says other operations have also benefited from Altech's relationship with Telkom - demand for switching equipment is up by 300%. The group's distribution division - which last year tied up with the world's largest distributor of electronic components, Arrow Electronics of the US - is a major supplier of telecoms components to AAT.
Venter estimates R18-billion of the R32-billion plan is a potential market for Altech's various operations.
Telkom contracts add both volume and value to Altech, but Venter is quick to point out the group does not sink or swim on Telkom's largesse.
"Over the past year we have ensured Altech's operations have become focused in a number of core areas by putting the right company in the right home and linking them up with top international technology companies."
In the past year alone links have been established with Arrow Electronics, French defence giant Thomson-CSF and the largest global smart card manufacturer, Schlumberger, also of France.
Altech and Thomson-CSF are jointly bidding for the software system of the SA Navy's Corvette ships contract, a tender worth about R500-million.
Rationalisation has also played a key role in the group's improved performance, including a slight reduction in staff numbers to just under 3 250.
The 7% rise in turnover to R2.1-billion in the year to end-February translated into a 46.5% surge in operating income to R181-million. Headline earnings were up 26% to 882c a share and dividends by 18% to 450c.
The balance sheet shows cash resources up from R396-million to R501-million and net asset value per share 20% improved at R62.97.
A strong focus of this year's expansion plan will be IT, with the company clearly hoping to benefit from the astronomic ratings of IT stocks on the JSE. Venter says the IT company will be separately listed over the next few months. Apart from existing operations such as Isis and its smartcard division, the IT group will be boosted by local and international acquisitions.
With an estimated turnover of between R300-million and R400-million, the company will already rank as one of the larger IT groups on the market.
Another area of growth could be JSE-listed Autopage, which operates in the cellular and paging market. Venter says Autopage has been talking to listed Radiospoor about a possible tie-up.
Altech has been mentioned as a possible equity partner in the bidding for a third cellular phone licence, but Venter denies the speculation. "We will remain a supplier of infrastructure only."