Altron Limited (AEL) Trading update summary

Strategic Execution and Business Performance

• Continued execution of a three-year strategy focused on building a leading platform and data ecosystem, with no change in strategic direction.

• Platform segment now accounts for 45% of revenue and 95% of profits, with ongoing efforts to further improve these metrics.

• Investments are being made in Netstar and FinTech to modernize systems, support growth, and open new revenue channels.

• IT services business, particularly Altron Digital Business, has returned to profitability with revenue growth now a key focus.

• Security IT services underperformed, prompting corrective actions, while the platform side of security remains strong.

Financial Highlights and Capital Allocation

• Group EBITDA and operating profit are up low to mid-teens, with margin expansion observed.

• EBITDA and operating margins have both increased slightly year to date, supported by annuity revenue and cost management.

• Depreciation has increased in both Netstar and FinTech due to growth in rental models.

• The business remains ungeared and net cash positive even after a special dividend payout of ZAR 750 million.

• Majority of CapEx is directed toward growth, especially in rental devices for Netstar and FinTech, with maintenance CapEx kept minimal.

Operational Updates and Segment Performance

• Netstar is undergoing a major ERP system upgrade to support scalability and data intelligence, with strong OEM and enterprise growth.

• Consumer retention initiatives have helped maintain the subscriber base, contributing to overall performance.

• Document Solutions revenue is flat but profitability and margins are improving due to a shift to higher-margin services.

• AI Factory investments are ongoing, with early positive customer feedback and faster decision cycles for POCs.

• Arrow distribution business showed positive momentum, with a growing order book and positive book-to-bill ratio.