Altron Limited (AEL) Status update summary

Business transformation and financial performance

• Profit more than doubled over 3.5 years, with FY 2023 profit at ZAR 450 million and FY 2026 expected to exceed ZAR 1 billion, alongside higher operating margins now in double digits.

• All business units are profitable or on track to profitability, with no loss-making entities in the portfolio.

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

• Annuity revenue now constitutes over 65% of total earnings, with platform businesses exceeding 90% annuity revenue.

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

Operating performance and environment

• Strong operational momentum in H2 FY2026 is expected to continue for the full year, building on a solid H1 foundation.

• Continuing operations achieved low double-digit EBITDA growth and over 20% operating profit growth year-to-date.

• Platforms segment contributed about 45% of revenue and 90% of EBITDA and operating profit.

• Revenue mix shifted toward annuity-based income, exceeding 65% of total revenue, supporting higher cash flow.

• IT Services segment faced ongoing market constraints, offsetting Platforms segment growth.

Segmental performance

• Netstar subscriber base grew from 1.2 million to over 2 million, with 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 delivered low-twenties percent EBITDA growth and high-teen operating profit growth, with improved margins due to completed R&D spend.

• Altron Digital Business returned to operating profitability after restructuring, with cost-reduction measures showing results.

• Altron Document Solutions improved EBITDA and operating profit by over 30% year-to-date.