Business acquisitions allow us to diversify our portfolio, penetrate new industry verticals and improve our offering to, thus strengthen our relationships with existing clients. However, the capital outlay associated with purchasing equity and/or financing the scaling of a business may reflect negatively on our shortterm cash balance.

We continuously strive to balance the costs and benefits of each acquisition by evaluating its strategic fit to our portfolio (both in terms of leading us into growing and profitable ITC segments and giving us access to new client industry verticals) and its financial performance prospects.

Unlike traditional businesses, at AYO we don’t view being operationally excellent as a trade-off between financial and human capital. It is not a straightforward equation of, for example, investing in technology to reduce staffing.

We instead invest both financial and human capital (by hiring additional staff to service new contracts, for example) to create better value for clients (improved relationship capital), create innovative products and services for them (manufactured and intellectual capital), contribute to the professional development of the staff involved in the project (human capital) to ultimately drive revenues (financial capital).

Creating a collaborative environment is pivotal to what we do at AYO as we believe that through strategic partnerships with key suppliers, clients and within our subsidiary businesses we not only enhance our ability to innovate (intellectual and manufactured capitals) but also boost our social and relationship capital (as we can better service our clients) and enrich our human capital by upskilling and reskilling them.

We will continue to dedicate time, energy and money on strengthening our supplier partnerships with leading global trendsetting brands and creating collaborative platforms for our subsidiaries to bolster the competitive edge of the AYO Group as a whole.

Managing our corporate and brand reputation, particularly in the short term is one of our foremost attention areas as it has a colossal impact on our ability to create value and deliver on our commitments. The new appointments in our management team and Board, while certainly improving confidence in our governance, ethical practices and ultimately trustworthiness, come at a cost.

These changes in leadership during turbulent times can feel like changing the engines of an airplane mid-flight and can have an unsettling short-term effect. The interim impact on our human and social/ relationship capital induced by governance changes in the last 18 months will be offset in the medium-term with positive effects for all our capitals, including:

• Strengthened capacity to deliver financial and other results with aligned leadership, vision and strategy.
• Social and relationship capital growth through inspiring trust and enhancing corporate image and brand perception.
• Improved compliance and rating with JSE and B-BBEE regulatory bodies and the associated upswing in social and intellectual capitals.

Training and development carry a high financial capital cost. During the reporting period, AYO spent over R3 million on staff training initiatives. The value created, however, in terms of positive influence for our human, intellectual and social capitals more than offsets the expenditure:

• 116 technology-related skills gained collectively amongst our employees certified by reputable industry names like Cisco Systems, Fiber Optic Association, Project Management Institute, VM Ware Cloud Infrastructure and others.
• 443 direct and over 1 000 indirect community beneficiaries of skills development campaigns we invested in including Techno-Girl Campaign, Innovation and Space Tour Exhibition, Joyful Computer Literacy Program and the educational foundations we support (SAME and QASA).
• Positive brand association, exposure and positioning (intellectual capital).