AltX-listed Alaris has its eyes locked on acquisition opportunities in the US and Europe as it narrows its losses for the year ended June 30.

The group, formerly known as Poynting, earlier this month abandoned its bid for Antenna Research Associates (ARA), after the US-based business failed to fulfil some of the conditions precedent to the takeover.

After efforts to negotiate revised terms of the June merger agreement to mitigate risks raised in light of the unfulfilled conditions were unsuccessful, Alaris exercised its right to terminate the deal.

“We regret the termination, especially considering the significant resources that were devoted to this acquisition. Management believes it was in the best interest of Alaris and its shareholders to terminate the merger agreement in light of the uncertainties created by the conditions that were not fulfilled and the inability to address the resulting risks,” explained Alaris CEO Juergen Dresel.

However, the proposed deal, which accounted for 80% of the R10.1-million legal and consulting fees accrued during the year under review, had whet the company’s appetite for acquisitive growth in the US and improved its understanding of the US regulatory landscape.

“In light of the termination of the ARA merger agreement, we will remain on the lookout to secure a footprint into the US and Europe and further identify companies that fit the company’s market profile and provide synergies to the group,” he said.

The group would specifically seek out potential companies with a slight product overlap and strong business development capability.

FINANCIAL RESULTS
Meanwhile, following a restructure and streamlining of its operations, which saw the company also move into a more “fit-for-purpose” premises in Centurion, Alaris posted a 102% surge in revenue from R95.9-million in 2014 to R193-million in 2015 and had narrowed its losses from R97.7-million last year to R5.1-million for the year under review.

The company’s normalised earnings a share from continuing business increased 41% from 11.6c in 2014 to 16.4c in 2015, while normalised earnings from continuing business rose 64% to R20-million.

Overall, Alaris posted a loss a share of 0.7c for the year under review, a turnaround on the loss a share of 58.3c recorded in the prior year.

Normalised headline earnings per share (HEPS) from continuing operations increased from 6.1c to a positive 18.2c, while overall HEPS for 2015 bounced back into the black at 15.22c, from a headline loss a share of 1.83c in the prior year.

“The biggest distortion is the complex accounting treatment of the African Union Communications (Aucom) contingent consideration shares for which a contingent consideration asset was raised for the estimated value of recallable shares at the end of the earn out period which expires on June 30, 2016. This was valued at R22.2-million,” Dresel explained.

The company noted that Alaris Antennas continued to deliver good growth, with revenue increasing 15% to R88.4-million during the period under review, while the division’s profit after tax surged 29% to R20.9-million in 2015.

Despite Aucom delivering lower-than-expected results after a delay in certain large orders for customers that were expected to materialise in 2015, the division’s revenue for 2015 remained above R100-million, with a profit after tax of R7.3-million reported.

Alaris’s discontinued Compart businesses recorded a loss of R6.3-million during the 12 months to June 2015.