AYO Technology is building revenues while its turnaround plan is progressing
AYO TECHNOLOGY Solutions’ communications, managed services, software and consulting divisions performed well in the year to August 31, helping the ICT technology investment group to lift revenue by 3% to R1.8 billion.
“The increased revenue demonstrates AYO’s capability to deliver on its professional mandate despite the enormous challenges we faced and that we are well-positioned to take advantage of the swing to a more digital-centric living and working world. AYO has continued to build on its turnaround plan, which is expected to return it back in the black by 2024,” chief executive Howard Plaatjes said yesterday. In the past year the headline loss per share decreased by 10% to 60.25c and the overall dividend for the year doubled to 60c.
Prioritising shareholders’ interests, whose beneficiaries include the Government Employee Pension Fund members, meant AYO deployed a hybrid dividend model – it pays out a stable dividend even in leaner periods, and the group expects to return to profitability in the immediate future.
Plaatjes said a subdued economy, continued negative publicity and ongoing banking challenges had inhibited AYO’s business development, organic growth initiatives, and its ability to complete significant acquisitions during the year. However, he said recent positive outcomes in negotiations with major shareholders and litigation to access its right to trade with a transactional bank account, had given the group new impetus.
Plaatjes said while the economy was constrained, signs of positive growth were making themselves apparent and AYO was looking to increase
the business development foothold it has attained in the African market.
“We remain committed to pivoting the business as each new challenge comes our way, which has inculcated a hardy resilience in our abilities to withstand them and honed innovative thinking that will safeguard this company’s future,” he said.
He said the acquisition of Kathea Communications had proved itself with revenue of R236m in the year – consolidated revenue of R93 million was received from Kathea for the six months to August 31, 2021.
The Healthcare division, despite a contract with a public services client fulfilling its term agreement, increased its gross profit margin to 47% from
39%. Other operating gains included fair value adjustments on investments. Additional operating gains of R59m were incurred compared to other operating gains of R34m in the previous year. Interest and investment income decreased to R147m in the current year, compared to R165m in the previous year. The decline was mainly due to a lower overall cash balance, triggered by the banking challenges the group was working on resolving.
On November 1, 2021, the group disposed of Puleng Technologies and lost control of Global Command and Control Technologies, which had contributed revenues of R227m and R111m respectively in the previous year.