AYO maintains stable revenue growth
CAPE TOWN - TECHNOLOGY investment group Ayo Technology Solutions (AYO) managed to navigate much of the Covid-19 fall-out and maintained stable revenue growth in the year to end-August, chief executive Howard Plaatjes said yesterday.
AYO lifted revenue significantly by 47.44 percent to R2.89 billion in the year, but operating profit fell due to the constrained operating environment through the lockdowns, and the lower interest rates.
Nevertheless, the group retained a strong balance sheet and net asset value remained robust at R4.3bn. Earnings per share decreased by 86 percent to 6.2 cents a share, while headline earnings per share decreased by 82 percent to 8.02c a share.
AYO was also confident that the adoption of broad-based technology products and solutions had been accelerated by remote working through the Covid-19 pandemic, and the rapid focus on evaluating and de-risking the end-to-end value chain.
These trends would have a longterm positive impact on the business going forward, Plaatjes said.
The group’s underlying investments were rooted in sectors that had grown significantly during the Covid19 era, although global supply chains had been interrupted through much of 2020 and would continue to put pressure on operating efficiencies in the foreseeable future.
AYO set its sights on a number of significant transactions during the year, including acquiring 100 percent of Kathea Communication Solutions Proprietary, as well as an offer to acquire 60 percent of Disruptive Vision Proprietary, which would allow AYO to establish a foothold in the renewable energy sector.
Plaatjes said the results were in line with expectations given the prevailing conditions, the final outcome of which was yet to be felt or determined by the world.
He said Covid-19 had given them the opportunity to restrategise and refocus operations, so the group was now well positioned to generate further stakeholder value.
Revenue at the Software and Consulting division, which provides digital solutions to retailers, media groups and brand agencies in Africa and Europe, decreased by 7.16 percent to R57 million mainly as a result of ICT cost-cutting from a major customer.
Security Solutions, which deploys customised security systems to organisational clients with its focus on identity, access management and governance, risk and compliance management, reported a 24.82 percent increase in revenue to R345m.
AYO initially owned 57 percent of this division and concluded an agreement on August 16, 2019, to acquire the remaining equity stake from minority shareholders for R38.5m.
At Unified Communications, which focuses on the reselling of telecommunications and gaming equipment of global brands, revenue increased by 23.97 percent to R91m, mostly due to the work from home policy by several companies during the national lockdown. AYO initially owned 51 percent of this division, but on February 21 acquired an additional 25 percent stake for R12m.
In the Healthcare division, which provides healthcare information systems across all levels in the public and private sector, revenue increased by 7.97 percent to R120m.
In the Tracking Solutions division, which provides technology for enabled awareness solutions both nationally and internationally, revenue of R89m was generated.
In the Managed Services division, which focuses on network infrastructure, support services and end-toend solutions, revenue increased to R2.18bn from R1.4bn.
Plaatjes said ICT would be a primary driver for the country’s economic revival and the group’s strong cash balance would allow it to take advantage of this.