AYO achieves 11% increase in headline earnings, declares dividend
CAPE TOWN – AYO Technology Solutions, which is defending legal action by the Public Investment Corporation (PIC), lifted headline earnings per share by 11 percent to 53.53 cents off the back of a 207 percent rise in revenue to R1.9 billion in the year to August 31.
The broad-based black empowerment information and communication technology group, one of the largest in the country and which is controlled by Sekunjalo Investments-owned Africa Equity Empowerment Investments, said on Friday that work on a contract with a multinational company that started in July, and two acquisitions, Sizwe IT and SGT Solutions, had significantly boosted revenue.
A dividend of 16 cents per share was declared. AYO has paid out R221 million in dividends since listing in December 2017.
AYO‘s challenges in the past year included dealing with governance allegations made during the PIC Commission of Enquiry that resulted in the re-auditing of the 2018 and 2019 interim results, and receiving a summons from the PIC seeking to declare a share subscription agreement invalid, which was being opposed by the group.
AYO’s management disclosed details of the R4.3 billion that was raised at the listing.
Some of the funds were put into major contracts, which had contributed significantly to revenue growth, they said.
Two-hundred and twenty million rand was used to acquire Sizwe IT and GCCT. The purchase of preference shares from Bambelela Capital utilised R145m of the funds, and R100m was spent to establish a fin-tech fund.
The group also invested R90m into 4Plus, an investment holding company that focuses on opportunities in the 4th Industrial Revolution on the continent, and in a company established AYO and Loot online to specialise in e-commerce, notably in the business-to-business marketplace for fashion, luxury goods and services in Africa.
The group had also provided working capital for its subsidiaries for growth and expansion.
“The majority of the capital raised is still invested in banks,” and interest income of R488m had been received since listing.
AYO’s management said further that governance concerns by the JSE had been addressed, and the group remained committed to further improving its governance processes. The interim results being audited were expected to be released once the necessary year-end requirements were finalised.
Despite these challenges conditions, revenue from existing subsidiaries - the group employs some 1200 staff that serve over 500 clients in the public and private sectors - remained constant with the exception of Puleng Technologies, which had a significant once-off contract in the prior year.
Operating expenses increased due to the inclusion of the results of Sizwe IT, SGT Solutions and Global Command and Control (GCCT), as well as increased capacity at AYO in anticipation of new contracts.
AYO retained options to acquire 60 percent in Mainstream from Africa Equity Empowerment Investments and 27 percent of the shares in GCCT, which were exercisable between two to four years from the date of purchase of the two companies. These options had been fair-valued at year-end,” Ayo said in a statement.