(Alliance News) - Allied Electronics Corp Ltd said Thursday it will pursue the unbundling of its UK subsidiary, Bytes Technology Group Ltd, and a listing of the business on the London Stock Exchange.
The decision follows the completion of Altron's annual strategy, which resulted in the driving of a One Altron strategy. This involves the disposal of non-core assets, the rationalising of operations, and targeted acquisitions in high-growth areas.
During this review, the group concluded that the true value of Bytes is not reflected in Altron's share price, and has developed a growth trajectory different to the rest of the group.
Bytes is Altron's UK subsidiary and is based in Surrey, providing software services including network and data security, cloud platform development and management, as well as training in software use.
For Altron's six months ended August 31, Bytes UK's earnings before interest, tax, depreciation and amortisation rose by 46% to ZAR303 million, on revenue that grew by 13% to ZAR3.87 billion.
Altron said it will proceed with the necessary preparation for the potential listing of Bytes in London, with a secondary listing in Johannesburg. This preparation is likely to take 9 to 12 months to complete, after which Altron will reassess market conditions.
The group has already started the governance and leadership elements of the unbundling, which includes the creation of a board of directors for Bytes and the unit's separation from all functions to ensure a standalone operational business.
"In addition to the value created to date, through delivering on the One Altron strategy, the unbundling and listing of a fully independent Bytes UK has the potential to unlock further value for Altron shareholders and, at the same time to create, a successful standalone business operating in the UK," said Chief Executive Mteto Nyati.
Shares in Altron were up 5.8% at ZAR19.15 on Thursday in Johannesburg.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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