Revenue decreased by 8 percent to R792 million. The pre-tax loss increased by 29 percent to R85m. File photo.
AYO Technology Solutions widened its headline loss by 43 percent to 35.90 cents per share in the six months to February, 2022 after revenue fell as two of its companies no longer consolidated their full results and the group was impacted by the weak economy and continued negative publicity.
Revenue decreased by 8 percent to R792 million. The pre-tax loss increased by 29 percent to R85m.
AYO has interests in disruptive technologies that advance life, business, and economics. Its investment portfolio touches all aspects of technology, from connectivity and communications to software development and cloud-based services.
On November 1, 2021 AYO disposed of Puleng Technologies and lost control of Global Command and Control Technologies (GCCT). These had contributed revenues of R128m and R72m respectively, in the six months to February 28, 2021.
In the period under review, the group only consolidated R8m of revenue from Puleng and GCCT, which was generated in the two-month period to October 31, 2021.
This was offset by R82m from Kathea Communications. Kathea was acquired on March 1, 2021.
Additionally, a subdued economy, continuing negative publicity and ongoing banking challenges facing the group had constrained business development, organic growth initiatives, and its ability to complete acquisitions, resulting in no significant revenue growth, Ayo’s directors said.
Gross profit margins fell mainly because the managed services division earned lower margins from its contracts compared to the higher margin once-off contracts it obtained in the prior period, and the disposal of Puleng which earned higher margins in the prior six-month period.
Cost saving initiatives, retrenchments and restructuring resulted in lower operating expenditure.
In prior years, the group earned an average 3.5 percent per annum from its cash holdings. To obtain a higher return on cash holdings, the group invested in the stock market.
Interest income and investment income of R66m was generated in the period, compared with interest income and investment income of R94m in the prior period.
The decline was mainly because of lower cash balances. A pre-tax loss of R85m was reported for the six months ended February 28, 2022 as compared to a loss before tax of R66m in the prior period.
edward.west@inl.co.za
BUSINESS REPORT ONLINE
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