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AYO TECHNOLOGY SOLUTIONS LIMITED - Unaudited Interim Results For The Six Months Ended 28 February 2018

Release Date: 15/05/2018 17:45
Code(s): AYO     PDF:  
Wrap Text
Unaudited Interim Results For The Six Months Ended 28 February 2018

AYO Technology Solutions Limited
(Previously Sekunjalo Technology Solutions Limited)
(Incorporated in the Republic of South Africa)
Registration number: 1996/014461/06
JSE share code: AYO
ISIN ZAE000252441
("AYO" or the "Group" or the "Company")

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2018

Highlights compared to the prior year interim period
- Revenue increased by 49% from R234m to R349m
- Operating profit increased by 55% from R29m to R45m
- Profit before tax increased by 173% from R30m to R82m
- Earnings per share increased by 111% from 8.37 cents to 17.68 cents
- Total assets increased from R188m to R4 583m
- Total assets of the underlying subsidiaries of AYO increased by 98% from R139m to R275m
- Net asset value increased from R18m to R4 356m
- Net cash generated from operating activities increased by 16% from R16m to R19m


Overview

AYO is well positioned on the Johannesburg Stock Exchange ("JSE") as a leading black economic empowerment ("BEE") information and communications 
technology ("ICT") company with strong management expertise and a sound track record. The current improving market conditions and regulation 
pertaining to BEE have set AYO in good stead to capture the growing ICT spend across the South African market. AYO is currently servicing customers 
in Southern and Northern Africa, Europe and Mauritius. Its strategic alliance, with British Telecommunications South Africa ("BTSA"), provides it 
with access to global technology trends as well as access to the global market.

AYO is fully compliant in terms of the new Broad-Based Black Economic Empowerment ("B-BBEE") Act, 53 of 2002 as amended, ICT Sector Codes and has 
exceeded all the minimum requirements.

Having successfully listed on the JSE on 21 December 2017, AYO has effectively been listed for two months of this reporting period, however in the 
five months since Listing AYO has already shown excellent organic progress in delivering on its strategy presented in its pre-listing statement, 
issued on 13 December 2017 ("Pre-Listing Statement").

In the short time frame since Listing, AYO has had a successful first half operational performance, although certain key projects and transactions 
are still being finalised resulting in AYO management expecting a much improved and accelerated performance in the second half of the current 
financial year. Following extensive market engagements and the continued positive reception to AYO’s strategy by customers and acquisitions targets, 
certain of the processes and timelines have been extended to take better advantage of this strong goodwill in the market. Although not ideal, this 
could result in our current period results not meeting the expectation set out in the Pre-listing Statement, but in the long term will be highly 
beneficial to our shareholders and all stakeholders. In light of this, management are confident that all activities will result in the full year 
2019 results meeting and/or exceeding expectations set out in the Pre-listing Statement

The strategy as set out in the Pre-listing Statement was set to capture 5 - 8% of the vast South African ICT market by 2022. This would be achieved 
by exploiting AYO's competitive advantages, namely its empowerment credentials, global alliances and strong management and by expanding its existing 
service offering through organic growth as well as strategic and synergistic acquisitions. Within the first five months of AYO being listed, the 
Company has concluded a significant contract with a multinational client, further details of which are expected to be announced over the coming days. 
In this regard shareholders are referred to this cautionary announcement published on 18 April 2018.

AYO's acquisition strategy will compliment and augment its "Go to Market" strategy, as outlined in the Pre-listing Statement.  The Group with its 
Digital Ecosystem, comprises of AYO Platforms, AYO Digital and AYO Industries and is in advanced discussions with several complementary acquisition 
targets which will augment its "Go to Market" strategy and which will be announced in due course.

AYO has attracted and is attracting leading brands to its Digital Ecosystem which will enable AYO to significantly disrupt the ICT market. 
These brands will look to leverage off AYO's market leading B-BBEE credentials and will position AYO in new market segments. One of AYO's major 
competitive advantages is that it has no legacy business or overhead structures preventing it from building a market leading digital capability for 
its customers, whereby it will create broad-based stakeholder value.

Reporting entity

The consolidated interim financial statements for the six months ended 28 February 2018 comprises of AYO, the Company and its subsidiaries.

AYO listed on the main board of the JSE on 21 December 2017. Accordingly, the comparative interim results reflect the six months ended 28 February 2017, 
which was prior to the Listing. The 28 February 2018 interim results only reflect two months of trading since the Listing.

As a result of the Listing the issued share capital of AYO increased from 212 382 539 to 346 511 621 ordinary shares. 


CONDENSED GROUP STATEMENT OF FINANCIAL POSITION

                                                                                               Unaudited at        Unaudited at         Audited at
                                                                                           28 February 2018    28 February 2017     31 August 2017
                                                                                                      R'000               R'000              R'000
Assets
Non-Current Assets                                                                                   70,346              69,962             78,401
Property, plant and equipment                                                                         6,729               8,115              7,118
Goodwill                                                                                             43,411              41,540             43,411
Intangible assets                                                                                    13,276               4,175             12,506
Investments in joint ventures                                                                            33                  33                 33
Investments in associates                                                                                 -                 319                  -
Loans to group companies                                                                              4,780               2,855              4,552
Other financial assets                                                                                  747               1,134                747
Operating lease asset                                                                                    12                   -                  -
Deferred tax                                                                                          1,358              11,791             10,034
                                                                                                  
Current Assets                                                                                    4,512,711             118,467            214,010
Inventories                                                                                          37,546               6,774              9,702
Trade and other receivables                                                                         160,756              59,450            110,428
Other financial assets                                                                               71,449               9,186             19,266
Current tax receivable                                                                                  680               1,256                384
Cash and cash equivalents                                                                         4,242,280              41,801             74,229

Total Assets                                                                                      4,583,057             188,429            292,411

Equity and Liabilities
Equity
Equity Attributable to Equity Holders of Parent

Share capital                                                                                     4,449,409             178,704            184,129
Reserves                                                                                             11,805              (2,476)                (4)
Retained income                                                                                    (104,351)           (158,019)          (151,787)
                                                                                                  4,356,863              18,209             32,338
Non-controlling interest                                                                             40,658              31,412             34,752
                                                                                                  4,397,521              49,621             67,090

Liabilities

Non-Current Liabilities                                                                              31,738              82,579             83,196
Loans from group companies                                                                           29,748              70,774             80,597
Other financial liabilities                                                                              38              10,764                 50
Finance lease liabilities                                                                             1,952                   -              2,549
Deferred tax                                                                                              -                   -                  -
Operating lease liability                                                                                 -                 488                  -
Non-current liabilities of disposal                                                                       -                 553                  -
                                                                                                    
Current Liabilities                                                                                 153,795              56,229            141,765
Trade and other payables                                                                            128,710              36,205            108,505
Loans from shareholders                                                                                  69                 304                 69
Other financial liabilities                                                                           8,268               6,647              5,692
Finance lease liabilities                                                                                 -                  -                 259
Operating lease liability                                                                               356                  56                305
Deferred income                                                                                       1,213              (2,389)             2,981
Current tax payable                                                                                   3,827               2,749              8,372
Provisions                                                                                            8,166              11,017             12,473
Bank overdraft                                                                                        3,189               1,640              3,109

Liabilities of disposal groups                                                                            -                   -                360

Total Liabilities                                                                                   185,536             138,808            225,321

Total Equity and Liabilities                                                                      4,513,057             188,429            292,411

Net asset value per share (cents)                                                                  1,257.35                8.57              15.23

Net tangible asset value per share (cents)                                                         1,240.99              (12.95)            (11.10)

Number of shares in issue                                                                       346,511,621         212,382,539        212,382,539


CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME

                                                                                               Unaudited to        Unaudited to         Audited to
                                                                                           28 February 2018    28 February 2017     31 August 2017
                                                                                                   6 months            6 months          12 months
                                                                                                      R'000               R'000              R'000

Revenue                                                                                             348,672             233,822            478,663
Cost of sales                                                                                      (223,859)           (149,636)          (319,921)

Gross profit                                                                                        124,813              84,186            158,742
Other income                                                                                          3,452               3,850             13,274
Operating expenses                                                                                  (83,576)            (59,235)         (125,263)

B-BBEE share based payment expense                                                                  (11,809)                  -                  -

Operating profit                                                                                     44,689              28,801             46,753
Investment revenue                                                                                   38,220               1,517              2,400
Finance costs                                                                                        (1,324)               (707)            (8,804)
Income from equity accounted investments                                                                 -                    -               (679)

Profit before taxation                                                                               81,585              29,610             39,670
Taxation                                                                                            (15,646)             (6,485)           (12,822)

Profit from continuing operations                                                                    65,939              23,125             26,848
Discontinued operations                                                                                   -                   -                  -
Profit from discontinued operations                                                                       -                   -              2,810

Profit for the year                                                                                  65,939              23,125             29,658

Other comprehensive income for the year net of taxation                                                  (5)                  -                 (4)

Total comprehensive income for the year                                                              65,934              23,125             29,654
Total comprehensive income attributable to:
Owners of the parent                                                                                 47,431              17,729             16,672
Non-controlling interest                                                                             18,503               5,396             12,982

Basic and diluted earnings per share (cents)                                                          17.68                8.37               7.86

Headline earnings and diluted headline earnings per share (cents)                                     17.36                8.37               5.66

Weighted (and fully diluted) average number                                                     
of ordinary share in issue                                                                      268,269,657         211,774,776        212,078,657


CONDENSED STATEMENT OF CHANGES IN EQUITY
For the six months ended 28 February 2018

                                                                                         Total attributable     Non-controlling
                                                                                          to equity holders        Total equity
                                                                                               of the group            interest       Total equity
                                                                                                      R'000               R'000              R'000

Balance at 01 September 2016                                                                           (749)             17,852             17,103
Profit for the year                                                                                  16,676              12,982             29,658
Other comprehensive income                                                                               (4)                  -                 (4)
Total comprehensive income for the year                                                              16,672              12,982             29,654
Dividends                                                                                                 -              (5,985)            (5,985)
Business combinations                                                                                16,416               9,902             26,318
Total contributions by and distributions to owners of company recognised directly in equity          16,416               3,918             20,334

Balance at 01 September 2017                                                                         32,339              34,751             67,090
Profit for the year                                                                                  47,435              18,503             65,938
Other comprehensive income                                                                                -                  -                   -

Total comprehensive income for the year                                                              47,435              18,503             65,938
Issue of shares                                                                                   4,343,594                   -          4,343,594
Capitalised listing costs                                                                            78,314                   -           (148,314)
B-BBEE Consortium Shares                                                                             11,809                   -             11,809
Dividends                                                                                                 -             (12,597)           (12,597)

Total contributions by and distributions to owners of company recognised directly in equity       4,265,280             (12,597)         4,252,683

Balance at 28 February 2018                                                                       4,356,863              40,658          4,397,521


CONDENSED GROUP STATEMENT OF CASH FLOWS

                                                                                               Unaudited to        Unaudited to         Audited to
                                                                                           28 February 2018    28 February 2017     31 August 2017
                                                                                                   6 months            6 months          12 months
                                                                                                      R'000               R'000              R'000
Cash flows from operating activities
Cash generated from operations                                                                       (5,978)             19,130             53,170 
Interest income                                                                                      38,220               1,517              2,579 
Finance costs                                                                                        (1,324)               (707)            (8,804)
Tax paid                                                                                            (12,152)             (3,917)            (6,955)
Net cash from operating activities                                                                   18,644              16,023             39,990 

Cash flows from investing activities
Net purchase and sale of property, plant and equipment                                               (1,119)             (7,082)            (3,287) 
Increase in internally generated intangible assets                                                   (1,148)             (2,372)            (1,205)
Business combinations                                                                                     -              (6,601)            (1,559)
Proceeds from disposal of subsidiary                                                                      -                   -             17,140 
Net repayment of loans from group companies                                                         (51,084)                  -                  -   
Proceeds from group companies                                                                             -                   -             10,483 
Purchase of financial assets                                                                         51,274               6,992            (13,612)
Net cash from investing activities                                                                 (104,624)             (9,063)             7,960 

Cash flows from financing activities
Net proceeds on share issue                                                                       4,265,280                   -                  -   

Net proceeds from other financial liabilities                                                         2,064              10,475                265
Repayment of shareholders loan                                                                          (79)             (2,582)              (530)
Purchase of other financial assets                                                                        -                   -             (3,256)
Finance lease payments                                                                                 (856)               (679)              (886)
Dividends paid                                                                                      (12,457)             (5,099)            (5,985)
Acquisition of additional shares in 
subsidiary in terms of a rights issue                                                                                     (2476)    
Net cash from financing activities                                                                4,183,952                (361)           (10,392)

Total cash movement for the year                                                                  4,167,971               6,599             37,558 
Cash at the beginning of the year                                                                    71,120              33,562             33,562 
Total cash at end of the year                                                                     4,239,091              40,161             71,120 

                                              
CONDENSED SEGMENTAL REPORT

                                                                                                  Software,                               Security
                                                                                       consulting & support         Head office          solutions
                                                                                                28 February         28 February        28 February
                                                                                                       2018                2018               2018
                                                                                                   6 months            6 months           6 months
                                                                                                      R’000               R’000              R’000

Revenue                                                                                              86,565              12,424            223,155
External sales                                                                                       85,572                (137)           233,155
Intergroup sales                                                                                        993              12,561                  -
Operating profit/(loss)                                                                              13,943             (12,818)            39,192
Material items included in operating profit/(loss)   
B-BBEE share based payment expense                                                                        -             (11,809)                 - 
Listing costs                                                                                             -              (5,677)                 -
Carrying amount of assets                                                                            82,260           4,308,573             15,109
Carrying amount of liabilities                                                                       42,795              29,664             96,461


                                                                                                                        Unified 
                                                                                                                  Communication              Group 
                                                                                                                    28 February        28 February
                                                                                                                           2018               2018
                                                                                                                       6 months           6 months
                                                                                                                          R’000              R'000
 
Revenue                                                                                                                  40,081            362,226
External sales                                                                                                           40,081            348,672
Intergroup sales                                                                                                              -             13,554                                                                                                                         
                                                                                                                             
Operating profit                                                                                                          4,371             44,688
Material items included in operating profit       
B-BBEE share based payment expense                                                                                            -                  -
Listing costs                                                                                                                 -                  -
Carrying amount of assets                                                                                                33,155          4,583,057
Carrying amount of liabilities                                                                                           16,618            185,537

                                                                                                  Software,                               Security
                                                                                       consulting & support         Head office          solutions
                                                                                                28 February         28 February        28 February
                                                                                                       2017                2017               2017
                                                                                                   6 months            6 months           6 months
                                                                                                      R’000               R’000              R’000

Revenue                                                                                             106,363               6,884             89,242
External sales                                                                                      106,174                 151             89,242
Intergroup sales                                                                                        189               6,733                  -
Operating profit                                                                                     15,678               3,918              4,490
Material items included in operating profit  
B-BBEE share based payment expense                                                                        -                   -                  -
Listing costs                                                                                             -                   -                  -
Carrying amount of assets                                                                            75,618              49,299             30,518
Carrying amount of liabilities                                                                       20,737              84,070             11,316


                                                                                                                        Unified 
                                                                                                                  Communication              Group 
                                                                                                                    28 February        28 February
                                                                                                                           2017               2017
                                                                                                                       6 months           6 months
                                                                                                                          R’000              R'000

Revenue                                                                                                                  38,256            240,745
External sales                                                                                                           38,256            233,822
Intergroup sales                                                                                                              -              6,922
Operating profit                                                                                                          4,716             28,800
Material items included in operating profit 
B-BBEE share based payment expense                                                                                            -                  -
Listing costs                                                                                                                 -                  -
Carrying amount of assets                                                                                                32,441            187,785
Carrying amount of liabilities                                                                                           22,130            138,254


Determination of headline earnings

                                                                                               Unaudited to        Unaudited to         Audited to
                                                                                           28 February 2018    28 February 2017     31 August 2017
                                                                                                   6 months            6 months          12 months
                                                                                                      R’000               R’000              R’000

Earnings attributable to ordinary equity holders from continuing operations                          47,431              17,729             13,862      

Discontinued operations                                                                                   -                   -              2,810 

Adjusted for:                                                                                             -                   -                  -   
 Loss/(profit) on sale of property and equipment                                                         (4)                  2                  8 
 Loss/(profit) on disposal of discontinued operations                                                     -                   -             (4,670) 
 Impairment loss                                                                                          -                   -                  -   
 Profit on sale of associate                                                                           (852)                  -                  -   

Headline earnings                                                                                    46,575              17,731             12,010 
 Continued operations                                                                                46,575              17,731              9,200 
 Discontinued operations                                                                                  -                   -              2,810 

Weighted average number of shares                                                               268,269,657         211,774,776        212,078,657 

Headline earnings per share (cents)                                                                   17.36                8.37               5.66 
 Continued operations                                                                                 17.36                8.37               4.34 
 Discontinued operations                                                                                  -                   -               1.33 


Reconciliation of reportable segments profit or loss

                                                                                               Unaudited to        Unaudited to         Audited to
                                                                                           28 February 2018    28 February 2017     31 August 2018
                                                                                                   6 months            6 months          12 months
                                                                                                      R'000               R'000              R'000

Total operating profit for reportable segments                                                       44,689              28,801             46,753
Adjusted for:
Profit/(loss) from equity accounted investments                                                           -                   -               (679)
Investment revenue                                                                                   38,220               1,517              2,400
Finance cost                                                                                         (1,324)               (707)            (8,804)
Profit before taxation                                                                               81,585              29,611             39,670
Taxation                                                                                            (15,646)             (6,485)           (12,822)
Profit for the period and total comprehensive income from continuing operations                      65,939              23,125             26,848
Profit from discontinued operations                                                                       -                   -              2,810
Profit for the period and total comprehensive income                                                 65,939              23,125             29,658


Group performance

The Group delivered excellent organic revenue and profit growth as a result of the strong contributions from all its underlying operations and 
investments for the interim period under review. Group revenue increased by 49% from R234m to R349m, compared to the prior interim period with all 
the divisions benefiting from the Group's synergies, empowerment credentials and excellent management expertise, gaining significant clients in 
the financial services sector. The Group's revenue and profit increased despite disposing of its investment in Saratoga Software (Pty) Ltd which 
contributed R26.6m revenue and R4.8m profit for interim period last year. 

Group operating profit increased by 55% from R29m to R45m compared to the prior interim period stemming from the organic growth in revenue.

Profit before tax for the period increased by 173% from R30m to R82m, stemming from the organic revenue growth and interest income from the capital 
raised being accounted for after operating profit.

Cash generated from operations has decreased due to an increase in working capital requirements to fund the growth within all the divisions in the 
Group in order to service projects and potential contracts.

Headline earnings per share ("HEPS") increased by 107% from 8.37 cents to 17.36 cents and earnings per share ("EPS") increased by 111% from 8.37 
cents to 17.68 cents for the six months under review.

The Group's asset base increased by 2 301% from R188m to R4 513m, which includes the capital raised from the Listing.

Net asset value ("NAV") increased by 23 717% from R18m to R4 356m due to capital from the Listing and the strong asset growth of the 
underlying investments. The NAV per share increased by 14 565% from 8.57 cents to 1 257 cents.

As AYO embarks on the execution of its strategy, head office costs increased to cater for the expected growth in the foreseeable future. The costs 
incurred at the interim period include executive payroll costs, Listing costs and an IFRS 2 adjustment for the shares issued to a B-BBEE Consortium
prior to Listing.

Software, Consulting and Support

The software, consulting and support division, focused mostly on digital consulting engagements and transformation projects, had revenue decrease by 
18.61%, from R106m to R87m, as a result of the sale of Saratoga Software (Pty) Ltd which contributed R26.5m revenue and R4.8m profit for the prior 
period interim, resulting in operating profits decreasing by 11% from R16m to R14m.

Security Solutions

The security division is focused on offering security solutions to enterprise, focused mainly on Identity and Access Governance Management. 
Revenues increased by 150% from R89m to R223m and operating profit increased by 695% from R4.9m to R39m. The increase is as a result of the 
division's improvement in ownership and empowerment credentials allowing the division to service a larger pool of clients. This is already bearing 
fruit in the financial services sector, where significant clients have been secured.

Unified Communications

The unified communications division is a reseller of globally recognised brands. Revenue increased by 58% from R38m to R40m as a result of better 
alignment and leverage with its principle supplier and customer requirements. Operating profit decreased by 8.5% from R4.7m to R4.3m as a result 
of investment costs into the establishment of a Mauritian subsidiary which will be used to service the rest of Africa in future.

Significant events

IFRS 2 B-BBEE share based payment:

AYO issued 31 960 000 shares at an issue price of R1.50 per share to a B-BBEE Consortium prior to Listing. At the date of issuance, the fair value 
of the AYO shares exceeded the issue price of R1.50. In accordance with reporting requirements, the discount offered resulted in an IFRS 2 
adjustment of R11.8m, which is recognised in the Statement of Comprehensive Income with the contra recognized directly in equity.

Listing on the JSE:
AYO listed on the JSE on 21 December 2017, resulting in the issued share capital increasing by R4 343m.

Listing costs amounted to R83.9m of which R78m related to fees for the placement of shares. These costs have been assumed to be directly 
attributable to the Private Placement and is in line with market expectations.

These expenses have been offset against share capital in equity in accordance with IAS 32 - Financial Instruments: Presentation.

The remaining R5.9m is an estimate of advisory and professional fees. It has been assumed that these are not directly attributable to the Private 
Placement expenses and have been included in operating expenses.

Events after reporting period

AYO has entered into an agreement to provide products and services to a multinational client, positioning the Group to challenge other incumbents 
in various industries. Refer to cautionary announcement dated 18 April 2018. Details of this agreement are expected to be announced over the coming days.

Basis of preparation

The condensed consolidated financial statements are prepared in accordance with the JSE Listings Requirements and the requirements of the Companies 
Act of South Africa, 2008 as amended. The JSE Listings Requirements require financial reports to be prepared in accordance with the framework 
concepts, the measurement and recognition requirements of International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting Guides 
as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and 
also that they, as a minimum, contain the information required by IAS 34 'Interim Financial Reporting'. The accounting policies applied in the 
preparation of the summarised consolidated financial statements are in terms of IFRS and are consistent with the accounting policies applied in the 
preparation of the previous audited consolidated annual financial statements.

The unaudited interim financial results were prepared by Chwayita Peter CA(SA), under the guidance of the chief financial officer, Naahied Gamieldien 
and were not reviewed or audited by the Group's external auditors, BDO Cape Incorporated.

Use of judgments and estimates

In preparing these condensed interim financial statements, management has made judgments, estimates and assumptions that affect the application of 
the accounting policies and the reported amounts of assets and liabilities, income and expenses. Due to the assumptions and judgments, actual results 
may differ from these estimates.

The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty are consistent 
with those applied to the audited consolidated financial statements for the year ended 31 August 2017.

Measurement of fair values

The Group has an established control framework with respect to the measurement of fair values. The fair valuation calculations are performed by the 
Group's finance department and operational team on an annual basis which the Group's chief financial officer reviews.

The valuation reports are approved by the investment committee in accordance with the Group's reporting policies.

Prospects

AYO's acquisition strategy is on track to complement and augment the current businesses, the alliance with BTSA and enhance its vertical 
industry "Go to Market" strategy.

The current target companies have been engaged in three key focus areas, being disruptive IT platform services, digital transformation and specific 
industry vertical expertise. AYO's Digital Ecosystem will focus on these areas through, AYO Platforms, AYO Digital and AYO Industries. Divisionally, 
we expect to be reporting under these focus areas in future.

AYO Platforms is focused on attracting disruptive platform businesses which will complement the comprehensive cloud services BTSA is already able 
to offer AYO and will give customers the ability to source various, data, network, communications and security services through various consumption 
models including on-premise, hybrid and cloud. AYO has embarked on due diligences with 3 target companies in this regard and will be well positioned 
to disrupt this market.

AYO Digital is building distinct areas of expertise including Internet of Things (IOT) Platforms, Big Data Analytics, Artificial Intelligence (AI) 
and Business Process Innovation and Transformation skills. AYO is in advanced discussions with 3 target companies who are recognized leaders in 
this field.

AYO Industries is focused on attracting companies that have leading offerings and significant contracts in particular vertical industries.  In the 
short term, the company will be looking to add to its already comprehensive intellectual property in health and mining, oil and gas industries with 
additional competencies in financial services, service provider and public sector verticals. AYO is in advanced due diligence with targets in 
each of these industries.

On successful completion of certain acquisitions, AYO will be strongly positioned to win significant market share in its industry and to challenge 
and disrupt the ICT landscape that has been dominated by the same brands.

Through the above strategies, AYO's product and service portfolio and Digital Ecosystem, it should be able to service a substantial customer base and 
capture 5 - 8% of the South African market by 2022. Management remains confident that the forecasts in the PLS to 2019 remain achievable given new 
contracts and the expected acquisitions that AYO will be announcing in due course. The exciting growth prospects that these target businesses will 
enjoy within the AYO Digital Ecosystem will have a compounding effect on the company's organic growth through to 2019 and beyond.

The Group's auditors have not reviewed nor reported on any comments relating to this announcement.

Dividends

No dividends have been declared for the interim period ended 28 February 2018.

Appreciation

We wish to thank our employees, Group executives, management, our Board of directors as well as our strategic partners, stakeholders and business 
partners for their loyalty and dedication in contributing to the success of the Group.

Mr Salim Young                                               Mr Kevin Andrew Warwick Hardy
Independent non-executive chairman                           Chief executive officer

Cape Town
15 May 2018

Directors
S Young (chairman)*#; K AW Hardy (chief executive officer); N Gamieldien (chief financial officer), S Nodwele (chief investment officer); 
W G Madzonga*#; K Abdulla*; C F Hendricks*; A B Amod*#; T M Ntsasa*#; M F Khoza*#; Advocate N A Ramatlhodi (appointed on 7 March 2018)*#
* non-executive
# independent

Company secretary: Nobulungisa Mbaliseli

Registered address: Quay 7, East Pier, V&A Waterfront, Cape Town, 8001
Email: nobulungisa@ayotsl.com

Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, 19 Ameshoff Street, Braamfontein, 2001

Auditors
BDO Cape Incorporated
6th Floor, 123 Hertzog Boulevard, Cape Town, 8001
(PO Box 2275, Cape Town, 8000)

Sponsor
PSG Capital Proprietary Limited
1st Floor, Ou Kollege Building, 35 Kerk Street, Stellenbosch, 7600


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