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Alaris Holdings releases stable interim financial results, strong organic growth


Revenue from continuing operations increased by 21% from R84.7 million to R102.6 million.

altLocal JSE AltX-listed technology holding company, Alaris Holdings (Alaris), released its interim financial results on 26 February. The continuing operations performed satisfactorily during the first six months of the financial year.

Highlights:
* Revenue from continuing operations increased by 21% from R84.7 million to R102.6 million.
* Headline earnings per share from continuing operations increased by 125% from 8.26 cents to 18.62 cents.
* Normalised earnings from continuing operations increased by 67% from R13 million to R21.7 million.
* Net cash from operating activities increased by R33.3 million from an outflow of R14.9 million to an inflow of R18.4 million for the half-year.


"Revenue from continuing operations increased by 21% to R103 million. COJOT, our Finland-based operation, had a strong first half-year, while Alaris Antennas experienced a slower first six months. The lower revenue is a function of the product mix with a higher proportion of precision engineering projects. These take more time, requiring development of new products and customisation of existing products", says group CEO, Juergen Dresel.

Segmental overview

Alaris Antennas, with its head office in Centurion, designs, manufactures and sells specialised broadband antennas as well as other related radio frequency products. Its products are used in the communication, frequency spectrum monitoring, test and measurement, electronic warfare and other specialised markets. For Alaris Antennas, 70% of revenue is generated from direction finding, monitoring and other related RF electronics and products.

Dresel further added: "The competitive advantage for Alaris Antennas is its ability to develop and hold its own IP as a result of its client-centric model. The products are designed locally by a highly skilled team of engineers and approximately 90% of the company's revenue is derived from exports, which provides a strong justification to increase the group's footprint globally."

COJOT had a pleasing result for the first half year, as revenue increased by 128% from R17.5 million to R39.9 million and profit after tax ("PAT") increased by 383% from R2.4 million to R11.8 million.

"COJOT's revenue was assisted by several larger European orders, including a portion of a €1 million order received in June 2017. The healthy revenue contributed towards the higher profit margins," Dresel explained.

COJOT Oy is a Finnish-based company that develops innovative broadband antennas to improve connectivity, coverage and competitiveness of radio equipment deployed to save lives and protect property. During this period, almost 70% of COJOT's revenue was generated from counter-RCIED products.

Prospects

Alaris Antennas is expanding its geographies by entering into new market segments where core competencies can be leveraged. Management believes the business has significant potential for organic and acquisitive growth where there is a complementary opportunity in markets and products.

Organic growth is stimulated and achieved through understanding customers' needs and by adding new innovative products to the portfolio. Further opportunities for growth are achieved by adding distributors, agents and new system houses as clients.

The company has invested in onsite Environmental Stress Screening ("ESS") equipment, which includes a humidity chamber and vibration equipment. This will allow the group to further improve quality and customer service.

COJOT Oy maintains a client-centric approach, similar to Alaris, and it makes use of a direct sales team and select channel partners to build the order book.

The company has a team of highly skilled engineers with many years of experience in design and development that provides a competitive advantage and superior client service.

The company has established various partnerships with key contract manufacturers. These partnerships provide efficiency and scalability, as well as seamless quality, to its client base.

Alaris and COJOT are strongly focused on research and development and hold exploitable patented technologies that can be monetised into the future. The group remains positive about prospects for the period ahead and the focus is to ensure profitable organic growth.

"The combined operations allow existing customers to receive an improved service and an expanded product portfolio. As such, the design and development of new products from the combined skill sets of the two companies will provide more competitive features, enabling increased performance for end-users," says Dresel.

The group objective of becoming the preferred supplier of innovative RF products both locally and internationally is gaining momentum with sustainable organic growth and an increased global footprint.

Editorial contacts:
Alaris Antennas
Sonja Balt
(+27) 11 034 5300
sonja.balt@alaris.co.za



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