Alviva hikes dividend by 90% on blowout results

Alviva Holdings has hiked its dividend by 90% to 55c/share after reporting a strong full-year financial performance, boosted by the IT distribution group’s acquisition of Tarsus.

Revenue jumped 57% to R23.4-billion – it would have climbed by a still-strong 23% without the Tarsus acquisition – while headline earnings per share, a keenly watched metric by South African investors, were up 91% to R5.45.

“Alviva delivered an excellent set of results, with elevated demand for its products and services being felt across all operating segments throughout most of the reporting period,” the group said in commentary alongside the results for the period ended 30 June 2022. “The acquisition of Tarsus Technology Group with effect from 1 July 2021 has had a material effect on these financial results.”

The strong performance was achieved despite “the many challenges encountered, with the riots of July 2021, the cyberattack on Transnet, intermittent load shedding and Covid-19 restrictions all making commercial life perpetually demanding”.

“The worldwide shortage of semiconductors and certain raw materials has remained in place, restricting the group’s ability to meet customer demand, albeit that this has been the case for some time and has improved on certain product lines,” it said. “Logistics costs have increased dramatically, and the supply of all products has been volatile and unpredictable.”

Alviva’s largest subsidiary, Axiz, had “an excellent year and delivered a 40% increase in profit before tax”. Its Pinnacle unit had a “standout performance”, while Obscure Technologies increased revenue by 73% and profit before tax by 95%. Tarsus delivered “steady profits under a well-managed and disciplined team”.

In services, Datacentrix increased profit before tax by 24%, while DG increased profit before tax by 34% on the back of 42% improvement in revenue.

Read: Alviva shares leap higher on R3-billion take-private plan

Alviva, which is led by CEO Pierre Spies, said it remains locked in discussions about a potential deal involving a consortium of investors buying out the group.

The non-binding expression of interest from Tham Investments and DY Investments involved a cash offer to acquire all ordinary shares of Alviva they do not already own for R25/share. If the transaction gets the green light, Alviva will be delisted from the JSE. Tham and DY currently hold 18.6% of Alviva’s shares.  – © 2022 NewsCentral Media

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