DURBAN – JSE-listed AYO Technology Solutions is eyeing more acquisitions in the future, backed by its strong balance sheet with R4.3 billion available for value-creating acquisitions.
AYO, a leading information communications technology (ICT) company, has already acquired 55 percent equity in Sizwe Africa IT Group (Sizwe), of which the transaction value for AYO is estimated to be R165 million for the percentage equity purchased.
Sizwe Africa IT Group is one of South Africa's leading integrated ICT solution providers and employs more than 800 people nationally.
AYO said the business had a broad base of blue chip private customers and public sector customers with a strong annuity-based income.
Sizwe had revenue contributions of more than R1bn and earnings before interest, tax, depreciation and amortisation of R75m for its year to end June.
The transaction with Sizwe will create further scale within the AYO platforms and broaden its customer base, public sector presence and contribute more than R1bn revenue in the next 12 months towards the AYO group.
AYO acting chief executive and chief financial officer Naahied Gamieldien said: “The acquisition of Sizwe is another indication of how our ambition to realise our goals and objectives that we set out in our strategy, are coming to fruition.”
In the year to end August, AYO delivered satisfactory organic revenue and profit growth as a result of the strong contributions from all its underlying operations and investments.
Group revenue increased by 33 percent to R638m, up from R478m, with all divisions benefiting from the group's synergies, empowerment credentials, excellent management expertise as well as gaining significant clients in various sectors.
Profit before tax increased by a significant 390 percent to R196m, up from R40m, mainly due to organic revenue growth and interest income from the capital raised on listing.
Net cash generated from operating activities increased by 243 percent to R137m compared with last year's R40m while the group's asset base increased by 1 500 percent to R4.67bn, up from R292, including the capital raised from the listing.
AYO declared a dividend of 30 cents a share during the year.
“I am pleased with our financial year-end results and looking forward to the next exciting phase in the growth of AYO.
"AYO is well-positioned on the JSE as a leading ICT company, and is in a favourable position to attract growing ICT spend across the South African and African markets. The group has strong management expertise and a sound track record,” Gamieldien said.
AYO is currently servicing customers in southern and northern Africa, Europe and Mauritius and is working on international business.
Independent non-executive chairperson Dr Wallace Mgoqi said it had been an unusually tough year in the market for AYO.
“However, despite media speculations and the resultant negative publicity, I am so proud of the AYO team as they remained focused, were not distracted by the ‘noise’ and remained determined to grow the AYO business in a sustainable manner, focussing on improved client service, with a special emphasis on job-creation within the ICT sector and most importantly, increasing shareholder and stakeholder value,” he said.
AYO recently announced that it planned to participate in the government's auction of batches of radio frequencies as well as the licensing of spectrum in the 700MHz, 800MHz and 2.6GHz bands, early next year.
Last month AYO announced that it had embarked on a R100m joint venture with Vunani to expand the fintech platform and financial services activities.
“The interface between ICT and telecoms, a core enabler provided by AYO, is said to be expanded on and access to global partnerships will, over the next decade, be the great disrupter in financial services on the African continent,” the group said.