Altron Limited (AEL) Status update summary

Business transformation and financial performance

• Profit more than doubled over 3.5 years, with FY 2026 profit expected north of ZAR 1 billion and operating margins now in double digits, up from 5%.

• All business units are profitable or on track, with no loss-making entities; ADB expected to return to profitability for the full year.

• Balance sheet is ungeared, with over ZAR 1 billion in available debt facilities and cash, driven by strong free cash flow.

• Annuity revenue now represents over 65% of total earnings, with platform segment annuity revenue above 90%.

• Return on invested capital improved from below WACC to 19% in the last year, reflecting disciplined capital allocation.

Strategic focus and segment performance

• Platform segment contributes 45% of revenue and about 90% of EBITDA and operating profit, with double-digit revenue growth (12% in FY 2026).

• IT Services segment saw revenue decline but is managed for efficiency and positioned for market recovery, with improved profitability after restructuring.

• Netstar subscribers grew from 1.2 million to over 2 million; strong growth in South Africa and improving metrics in Australia.

• FinTech achieved high-teen revenue growth and high-twenties percent EBITDA and operating profit growth, with annuity revenue over 80%.

• HealthTech margins improved due to completed R&D spend and strong private practice customer acquisition, with low-twenties percent EBITDA growth.

Capital allocation and growth outlook

• Over ZAR 1 billion allocated to growth in platform businesses; capital allocation priority remains on these segments.

• Cash will be used for organic growth, maintaining liquidity, and returned to shareholders if surplus remains.

• No current acquisitions announced, but market is monitored for opportunities; focus remains on organic growth and platform investment.

• Free cash flow conversion improved in 2H due to higher contribution from scalable, capital-light platform businesses.

• Focus on capital deployment into higher-margin, annuity-revenue growth opportunities continued in H2 FY2026.