Investor Relations

Press Releases

Newly Listed Actowers Targets Emerging Market Expansion

29 November 2006

Shares in ACTOWERS, which listed today on Altx, began trading at 127 cents per share, a premium of 27% to the 100 cents per share price at which the shares were placed with institutions during a private placement ahead of listing.

The listing on Altx provides the company with sufficient funding to accelerate organic and acquisitive growth, and is also an incentive for the retention and reward of key staff members through equity participation, while also facilitating a future potential BEE transaction.

ACTOWERS’ private placing of ordinary shares before listing was approximately 10 times oversubscribed. Institutions paid 100 cents per share and 105.8 million shares were offered, raising R105.8 million before expenses. The company is set to achieve pro forma headline earnings per share for February 2007 of 13.0 cents and is forecasted to increase this to 14.5 cents for February 2008. ACTOWERS will have 230 million ordinary shares in issue and listed and at 100 cents per share, equates to a 2007 PE of 7.7x and a 2008 PE of 6.9x.

ACTOWERS expects to increase its turnover by 21.5% to R157.2 million for the year ending 28 February 2007, from an audited turnover for the year ended 28 February 2006 of R129.4 million, through the involvement in a number of projects in emerging markets. Operating profit for the year ended 28 February 2006 was R29.3 million (operating profit margin of 22.6%), with a forecasted increase of 17.8% to R34.5 million (operating profit margin of 22.0%) for the year ending 28 February 2007.

“We have great expectations for ACTOWERS as a leading supplier of telecommunications solutions in Africa and other emerging markets” says CEO Chris Kruger. “We definitely intend to acquire businesses which will form part of our supply chain to ensure that we maintain these very attractive margins and reduce reliance on third party suppliers.”

With the world’s cellphone market expected to grow from a current 2.5 billion to over 3 billion users by 2008, with the bulk coming from emerging markets, ACTOWERS, through its existing footprint in 24 of the 53 African countries as well as in the Gulf States, Dubai, Kuwait and India, is well poised to benefit from the strong growth in this industry.

Business overview

The main business of the company is the manufacturing and fabrication of steel communication towers, portal factories, steel fencing, diesel and water tanks, solar structures and general steel engineering. ACTOWERS were pioneers in the construction of cellular towers in Africa, putting up the first one in Gabon in 1999.The company also manages ‘turnkey’ telecommunications network projects including global systems for mobile telecommunications, wireless local loop, fixed wireless and very small aperture terminal technology, a highly specialised industry. Turnkey solutions make up 60% of the revenue, and 40% of revenue is made up of customers requiring components only.

ACTOWERS has constructed more than 900 projects in Africa since its inception in 1999, which includes more than 3000 towers at some of the most rural and remote areas in Africa. The company has built up a very strong reputation and track record with well established cellular operators in Africa, and is the only company which provides both the manufacturing and project management of cellular sites.

The company has offices in Johannesburg, Democratic Republic of Congo, Gabon and Sudan. It has had its own manufacturing facility since 2004 with the capacity to produce 1200 tons of steel per month.