The Unified communication division, comprising Kathea Communication Solutions and Kalula Communications, improved its performance which was reflected in the improved revenue to R574m from R545m. Picture Simphiwe Mbokazi / Independent Newspapers.
AYO Technology Solutions’ did well to cut its loss to 72.02 cents per share for the year to end-August 31, 2024 compared with a loss per share of 180.53 cents per share for the previous year to end-August 31.
“The past year has been one of considerable change and challenge, but we look forward to further capital preservation, supporting subsidiary growth and continued commitment to serving customers, positively impacting the communities in which we operate and creating value for stakeholders,” AYO’s directors said.
Revenue decreased by 17% to R1.9 billion from R2.3bn. The pre-tax loss decreased by 65% to R229m from R653m in the prior financial year. The headline loss per share per share decreased by 59.31% from 176.46 cents per share. No dividend was declared.
The decline in group revenue was due to lower revenue from the Managed services division, which is a major contributor.
Sizwe IT Group, which forms part of that division, contributed revenue of R805m compared to R1.2bn in the prior year. Its lower turnover was from contracts winding down in the period. The division’s turnover decreased to R1.21bn from R1.6bn.
The Unified communication division, comprising Kathea Communication Solutions and Kalula Communications, improved its performance which was reflected in the improved revenue to R574m from R545m.
The revenue growth for the two entities in the Unified communication division was attributed to companies either permanently moving back to office or adopting a hybrid working environment and expansion into new territories.
The group gross profit percentage improved to 19% from 16% due to improved margins achieved in the Managed services and Unified communications divisions, as a result of service contracts that have better margins.
Due to legacy contractual costs still to be unwound, operating costs remained high due to restructuring costs, legal fees for ongoing litigations and impairment of non-performing investments.
The improved loss before taxation of R229m as compared to a loss before tax of R651m in the prior financial year, was mainly due to the improvement in gross margins and the cost reduction exercise yielding results.
The ongoing banking challenges facing the group had constrained organic growth initiatives, as a result of lack of access to external funding due to the banking matters.
“The group, however, continues to focus on remaining resilient despite the challenges it faces which is clearly indicative by the results of AYO’s underlying subsidiaries despite these challenges,” the directors said.
BUSINESS REPORT