THE BOTTOM LINE
The MultiChoice millstone gone, Altron can get cracking
Sale of set-top box maker Altech frees group to focus on information and communications technology
Altron CEO Mteto Nyati can finally focus his attention on the group’s core information and communications technology (ICT) business. The group said on Tuesday it had found a buyer for Altech UEC, which is best known for making set-top boxes for MultiChoice. The unit also manufactures televisions and tablets.
The sale will be a huge relief for Nyati and his management team, who inherited the difficult task of finding buyers for Altron’s underperforming manufacturing businesses – particularly Powertech Transformers, which makes cables and transformers mostly for Eskom, and Altech UEC.
Nyati joined the company from MTN SA in April 2017. But while Altron is now free to focus entirely on its ICT operations, returning the business to its former glory will be a long and arduous task.
In 2007, the group was valued at nearly R16bn – making it one of SA’s largest listed firms. But strategic missteps, including its decision to hang on to the manufacturing assets despite the writing being on the wall, meant Altron’s fall from grace was swift. By early 2016, the group was worth just R1.7bn.
Nyati has made some progress in turning the ship around – Altron is now worth R6.4bn – but now the real work will have to start.
To regain its status on the JSE, Nyati wants to see Altron double its earnings before interest, taxes, depreciation and amortisation (ebitda) within five years. In the year to February, ebitda came in at R1bn.