Werner Kapp, CEO of Altron Group. (Image provided)
JSE-listed technology services company Altron is a recently established[–>artificial intelligence ([–>AI) The factory at the center of it all.[–>strategy Grow your platform-based business.
Altron Group CEO Werner Kapp said this in an interview yesterday after the company announced its annual financial results for the year ended February 28.
The company reported a 25% increase in annual operating profit to R1.2 billion as a result of a three-year restructuring drive that tripled overall earnings per share and shifted the group’s focus to platform-based businesses.
Last October, Altron announced the successful implementation of South Africa’s first operational AI factory, powered by NVIDIA AI infrastructure, including NVIDIA Accelerated Computing and NVIDIA AI Enterprise software.
An AI Factory is a centralized technology platform that combines computing infrastructure, data, software, and artificial intelligence models to develop, train, and deploy AI applications at scale.
Companies use AI Factory to provide customers with access to tools such as language models at scale, while embedding AI into their operations, products, and services to improve efficiency, automation, and data-driven decision-making.
Altron’s AI Factory provides AI infrastructure, tools, training, and support while maintaining data sovereignty and regulatory compliance. The platform is currently live with five launch customers, including Dataviue, Lelapa AI, and MathU.
Kapp said AI Factory was not founded as an independent revenue-generating business, but rather to enhance both internal capabilities and customer access to local, large-scale language models.
“AI Factory was never intended to be independently revenue-generating, but was first created to give our customers access to local, large-scale language models and ourselves.”
Kapp said the AI Factory forms a central part of Altron’s long-term growth plans as the company expands its platform-based business strategy and incorporates AI capabilities across its operations.
“The AI Factory is a key part of our future growth strategy. In addition to our large multi-platform business, we are building AI everywhere in our business and leveraging data as a competitive advantage, and the AI Factory plays a big role in that.”
Kapp explained that the AI Factory has two purposes. “The AI Factory has a dual role. We are a data and AI practice business within our Altron Digital business, helping our customers get the most out of their AI investments, while also helping drive our multi-platform business.”
However, he pointed out that the AI factory has not contributed significantly to the revenue during the past financial year, but the company expects it to start contributing from FY27.
Reflecting on the company’s performance over the past three years, Kapp said the disciplined execution of its strategy was one of the group’s biggest achievements.
“What is gratifying for us is that we were able to disciplinely execute the strategy that we have been pursuing for the past three years. We were able to grow all of our metrics, including revenue, EBITDA, and operating profit.
“We were able to reward our shareholders with a special dividend. The fact that we have transformed into a multi-platform company with a healthy balance sheet and high-quality earnings is another highlight.”
Kapp said Altron’s platform strategy spans multiple sectors including mobility, payments, healthcare and identity services, giving the company diversified exposure across industries.
“We have several companies on our platform, including Netstar, Altron FinTech, and Altron Digital. There are many companies that do platform business, and they operate in the same space.
“We have a number of platforms, including mobility, payments, healthcare and identity, and our platforms serve a variety of customers across a number of vertical industries. This is part of our unique positioning, as we are exposed to a wide range of sectors and consumers, not just a single sector.”
Regarding future growth plans, Kapp said the company has already entered a so-called “transformational growth” phase, with a focus on increasing capital allocation to its platform business.
“We are already two and a half months into our transformational growth era and are at the point where we are doubling our total capital allocation to our platform business.”
Kapp pointed to the scale of the company’s platforms, including Netstar’s more than 2 million subscribers, its fintech payment platform’s more than 5,000 small and medium-sized enterprises, and its healthcare platform’s more than 20,000 doctors.
“So for us, transformational growth is about continuing to serve these customers. We are seeing the digitalization of the South African economy increasing and that continues unabated. We are seeing the Department of Home Affairs increasing the digitalization of its services… so we think we are in a really good position to be able to continue to drive sustainable growth.”
