Alviva rises on solid earnings

Despite South Africa’s economic malaise, technology distribution and services group Alviva Holdings — formerly Pinnacle Holdings — has increased headline earnings per share by 12% for the year ended 30 June 2018.

The solid performance, coming a week after Mustek also reported good earnings growth, suggests the sector is performing relatively well, despite the tough economy.

Alviva declared a full-year dividend of 27c/share, an increase of 8% over 2017’s pay-out.

“The results are predominantly attributable to the performance of the ICT distribution segment and Alviva’s recent investments, mainly the acquisition of the balance of Datacentrix in February 2017, along with the investment into Alviva’s share repurchase programme,” the group said. The number of shares in issue fell from 166 million to 154 million.

Most businesses in the group performed well, Alviva said, except for its three infrastructure investments: Datanet, Infrasol and Solareff.

Revenue for the year increased by 6% to R13.6-billion. Expenses, though “well controlled”, increased at a greater rate than revenue due to a diversification strategy and investment into key areas of the business from which future growth is expected. This left the group’s Ebitda — a measure of operational profitability — down marginally to R820-million.

Working capital improved significantly during the year, with cash resources of R691-million, up from R390-million in 2017. Cash generated from operations was R1-billion (2017: R1.3-billion).

Alviva closed at R18.80/share on Wednesday, up 3.3% on the session.

Rival Mustek last week reported headline earnings per share up 28.2% and increased its dividend pay-out by 37.5% to 22c/share. Revenue was R5.7-billion, up from R5.2-billion a year ago.  — © 2018 NewsCentral Media