The Venter family said on Wednesday it would relinquish management of the Altron Group‚ the business it started more than 50 years ago, as it reported shocking results. It plans to hand over to an independent management team.
The company‚ which saw a 50% drop in headline earnings for the year to February‚ is aiming to exit non-core assets and bring in new equity partners‚ mainly at its power business.
The group said the board had undertaken a “fundamental review” and had decided to start the transition from a family-managed business to an independently managed structure.
“The family recognised that over time there would be a need for the business to move to an independent management structure,” said Altron chief executive Robert Venter.
But he said the family was fully committed to the business and would not sell its stake. He would remain CEO for the “foreseeable future”. “My role is to ensure we implement the changes and get through the tough‚ challenging time.”
Altron was started by Venter’s father Bill‚ and his brother‚ Craig, is the chief executive of subsidiary Altron TMT. It is a multi-billion rand entity with revenues of R27-billion and businesses spanning Europe‚ Africa and Asia ranging from power transformers‚ decoders‚ IT hardware‚ vehicle tracking and internet services. Its stock rose 3.5% on Wednesday after the announcement‚ to close at R14.50.
Speculation is that Robert Venter may take over from his father as chairman. The management has been questioned as it has lurched from one disastrous investment to another.
The biggest failure in recent years was expansion into East Africa through Altech‚ which resulted in billions in losses. Another venture that did not work out was Altech Node‚ a set-top box that incorporates video on demand and home security‚ which has cost it about R50-million. Altron is looking at exiting the business or partnering with a company that will help it market and distribute the product.
“Changing the management structure could be seen as an opportunity to shake things up‚ perhaps in order to get a different perspective on the direction the company should be taking‚” said Lehlohonolo Mokenela‚ industry analyst at Frost & Sullivan.
“But it seems unlikely that it will be wholesale changes. While it is possible they are looking for fresh ideas‚ they will probably be keen to retain the core principles on which the company has been run‚” he said.
Farai Mapfinya‚ head of equities at JM Busha‚ said the proposed change in management was a step in the right direction and “some might feel this should have been done a while ago”.
The diversified nature of Altron’s interests meant it ventured into areas where specialist skills were required but which were not necessarily available in the existing businesses.
He believed the recent poor performance was a strong factor in the decision to change the management.
Over the past five years some Altron divisions have “rarely fired on all cylinders all at the same time”‚ and divisions such as PowerTech and UEC could still disappoint‚ he said.
Irnest Kaplan‚ the managing director of Kaplan Equity Analysts‚ said the question remained: who would take over as CEO?
Venter family to hand over reins at troubled Altron
The company‚ which saw a 50% drop in headline earnings for the year to February‚ is aiming to exit non-core assets and bring in new equity partners‚ mainly at its power business.
The group said the board had undertaken a “fundamental review” and had decided to start the transition from a family-managed business to an independently managed structure.
“The family recognised that over time there would be a need for the business to move to an independent management structure,” said Altron chief executive Robert Venter.
But he said the family was fully committed to the business and would not sell its stake. He would remain CEO for the “foreseeable future”. “My role is to ensure we implement the changes and get through the tough‚ challenging time.”
Altron was started by Venter’s father Bill‚ and his brother‚ Craig, is the chief executive of subsidiary Altron TMT. It is a multi-billion rand entity with revenues of R27-billion and businesses spanning Europe‚ Africa and Asia ranging from power transformers‚ decoders‚ IT hardware‚ vehicle tracking and internet services. Its stock rose 3.5% on Wednesday after the announcement‚ to close at R14.50.
Speculation is that Robert Venter may take over from his father as chairman. The management has been questioned as it has lurched from one disastrous investment to another.
The biggest failure in recent years was expansion into East Africa through Altech‚ which resulted in billions in losses. Another venture that did not work out was Altech Node‚ a set-top box that incorporates video on demand and home security‚ which has cost it about R50-million. Altron is looking at exiting the business or partnering with a company that will help it market and distribute the product.
“Changing the management structure could be seen as an opportunity to shake things up‚ perhaps in order to get a different perspective on the direction the company should be taking‚” said Lehlohonolo Mokenela‚ industry analyst at Frost & Sullivan.
“But it seems unlikely that it will be wholesale changes. While it is possible they are looking for fresh ideas‚ they will probably be keen to retain the core principles on which the company has been run‚” he said.
Farai Mapfinya‚ head of equities at JM Busha‚ said the proposed change in management was a step in the right direction and “some might feel this should have been done a while ago”.
The diversified nature of Altron’s interests meant it ventured into areas where specialist skills were required but which were not necessarily available in the existing businesses.
He believed the recent poor performance was a strong factor in the decision to change the management.
Over the past five years some Altron divisions have “rarely fired on all cylinders all at the same time”‚ and divisions such as PowerTech and UEC could still disappoint‚ he said.
Irnest Kaplan‚ the managing director of Kaplan Equity Analysts‚ said the question remained: who would take over as CEO?
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos