Altron - Platform businesses drive FY25 upside

Altron reported EBITDA and operating profit before capital items and headline EPS well ahead of our forecasts for FY25. In the Platforms division, the strength of the FinTech and HealthTech businesses more than offset a weaker H2 for Netstar. The IT Services division beat our operating profit forecast even though Altron Digital Business (ADB) had a disappointing year. Management maintains its medium-term operating margin targets. We have revised our forecasts to reflect the H225 performance, with Platforms remaining at or above the targets for FY26/27. Due to the difficult trading environment for ADB, we forecast a slower margin progression for the IT Services division, resulting in a small downgrade to our FY26 HEPS from continuing operations before a return to growth of 19% in FY27. The imminent management buyout of Nexus removes the last discontinued business, leaving management to focus on the core business.

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