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Technology company Altron CEO says company’s strategy bearing fruit

24th November 2023

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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After undertaking an assessment and strategic steps to lay a strong foundation of growth, JSE-listed technology company Altron has been focused on “fixing, enhancing and repositioning”, before embarking on a period of “accelerated growth” to become the leading platform and information technology (IT) services business in its chosen markets.

A year after taking the reins as Altron Group CEO, Werner Kapp said that six crucial actions were undertaken to lay a strong foundation for growth.

“When I joined Altron in October 2022, I recognised the untapped potential. Despite our impressive assets and a prestigious customer base, our two largest assets, Altron Systems Integration and Netstar, were not performing optimally. Moreover, our noncore assets, Altron Document Solutions and Altron Nexus, faced challenges, owing to specific events, notably the loss of the Gauteng Broadband Network contract,” he said.

During the first strategic phase from October 2022 to February 2023, the company undertook in-depth business reviews of all operations to establish target operating models with measurable key performance indicators directly aligned with its strategy and implemented profit improvement strategies in Netstar and Altron Systems Integration, which are yielding results.

Altron further defined its aspiration to be the leading platform and IT services business in its chosen markets, along with a clear strategy, revitalised its team, established a new purpose to nurture a high-performance culture, with performance incentives driving a culture of excellence, and invested in core capabilities and key leadership appointments.

The group is also actively pursuing the divestments of the noncore assets Altron Nexus and Altron Document Solutions, which have been classified as held-for-sale in discontinued operations and managed for value, while simplifying its operational structure.

“These strategic steps have set us on a path of transformation and growth, enhancing our capabilities and positioning Altron for success,” Kapp highlighted.

During the 2024 financial year, Altron is centred on fixing, enhancing and repositioning, with a focus on people and culture, developing new target operating models to improve operating margin and cost inefficiencies, optimising the balance sheet, improving capital allocation and building market credibility through delivery on strategy.

“We are executing on three growth levers, namely growing revenue by partnering with our customers to get the most value out of their digital spend; driving operating leverage through improving our gross profit margin and discipling cost management; and investing in data-as-a-service and in scaling our Altron Security, Fintech and Netstar businesses.

“Our strategy is enabled through efficient capital allocation [and] differentiating our client offerings through collaboration, as well as accelerating our high-performance culture,” he continued.

From February 2024 to February 2026, the company will turn its focus to accelerated growth, which includes embedding “customer obsession” at every level of the organisation, executing the growth strategy and new operating model, delivering on medium-term guidance, ensuring prudent capital management and pursuing bolt-on acquisitions for capability and geography.

To establish a foundation for consolidated growth in the IT services sector, Altron Group will operate, effective March 1, 2024, a simplified model by combining the businesses of Altron Systems Integration, Altron Karabina and Altron Managed Solutions into the newly established unified Altron Digital Business, led by Craig Stewart.

The Altron Digital Business and Altron Security will together form part of the new IT Services segment.

Integrated Approach

“The integrated approach will offer a comprehensive value proposition, enhance solutions for our clients, facilitate collaboration and cross-selling capabilities and eliminate redundant costs across our IT services businesses,” Kapp commented.

Netstar, Altron FinTech and Altron HealthTech will continue to operate as part of the Own Platforms segment, which will remain unchanged, while Altron Arrow will operate under a new distribution segment.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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