How We Create Value For Our Stakeholders – AYO Integrated Report 2019

INTEGRATED
REPORT 2019

Value for stakeholders

SHAREHOLDERS: Delivering robust financial returns

Shareholders’ confidence is of paramount importance to us as a business. Our decisions and actions are guided by the intent to create value for our shareholders and deliver on their expectations. We aim to provide them with:

A solid investment case and understanding of our business strategy;
Continued, sustained capital growth;
Robust return on investment and dividend yield;
Assurance that our business activities and decisions are aligned with the strategy to create sustained value;
Assurance that sound, transparent and compliant governance is core to our business strategy; and
Proactive, open and truthful communication about the business.

How did we do in 2019

The financial results AYO delivered in 2019 are strong and positive. Our revenue grew by 207% compared to the previous financial year to a record R1.9 billion and we paid an amount of R223 million to our shareholders in our maiden interim dividend payout during the period under review. A final dividend of 16 cents per share was also approved by the Board for the financial year.

We’ve been steadily progressing on our pre-listing commitments and concluded three targeted acquisitions during the period in alignment with our strategic direction of portfolio diversification into growing and profitable niche ICT segments. Managing the financial capital of our shareholders responsibly is our top priority and we have achieved total asset growth of 10% in 2019 to R5.1 billion. In addition, we have reduced our operating expenses to 28% of revenue for the period, compared to 28.5% in the previous financial year.

Our internal capacity has been developed and our portfolio optimised to enable us to continue delivering sustained growth and value to our shareholders in 2020 and beyond.

Looking ahead

Beyond robust financial performance, capital growth and investment returns, we are focused on communicating effectively with shareholders in 2020. AYO’s executive management team is embarking on a detailed valuation of the Group’s intangible assets to validate and protect our shareholders’ investments. We recognise the necessity to communicate the value of our assets clearly to the investment community. This way we strive to accentuate our compelling investment case, improve investor confidence in AYO and provide safety and liquidity for our shareholders.

OUR PEOPLE: Investing in our staff

The ability to attract, engage and retain suitably qualified staff is crucial for the growth of any organisation, particularly in the ICT industry. To achieve this, AYO aims to become “the employer of choice” for talented individuals by offering a compelling employee value proposition, which is benchmarked continuously and improved on. We have adopted a total reward philosophy, which comprises a unique combination of career and growth opportunities, recognition, culture and values, compensation, benefits and work environment to motivate, recognise and reward employees and when necessary to attract the requisite skills from the labour market.

We focus on providing our staff with:

Competitive remuneration packages and equal pay;
Flexible working conditions to accommodate individual needs;
Pleasant, healthy and hygienic environment;
Job security;
Career development opportunities;
Skills training and education;
Accessible management and communication channels for employee engagement;
Diverse, inclusive and progressive work environment;
A culture that actively promotes innovation, entrepreneurship and excellence.

How did we do in 2019

A total of R86 million was paid in remuneration and benefits during the financial year to our 1 244 employees. Additional project-specific bonuses were paid to key individuals in recognition of their dedication in the implementation of important project roll-outs to the value of R2.3 million.
Our skills development budget was mainly spent on the development of employees across designated levels of the organisation. Targeted development programmes were implemented for high potential and high performing designated groups, to position them for senior roles.
Employment equity targets for the business were established and closely monitored by the social, ethics and transformation committee. With our current workforce composition of 40% female and 65% black employees AYO is one of the most “transformed” ICT employers in South Africa.
A number of formal and informal staff engagement sessions were carried out throughout the year to encourage the development of an accommodating, diverse and inclusive corporate culture. We celebrated our successes together, rewarded hard work and congratulated achievements.

Looking ahead

Investing in skills development will continue to be a focal point in our employee value proposition delivery in 2020. We aim to implement company-wide training initiatives to build capabilities around client centeredness, operational excellence, design thinking and other leadership and innovation capabilities.

We will continue to monitor our performance against set employment equity targets and benchmark our employee proposition against industry peers to ensure the competitiveness and relevance of our offering. Healthy, safe and pleasant working conditions will remain an essential component of our total reward package. A formal benchmark study against industry peers will be carried out to identify possibilities for enhancing our employee value proposition.

CLIENTS: Creating growth and great client experiences

AYO’s client base comprises of large and small businesses across various industries from mining, oil and gas to banking and mobile service providers. As diverse as our clients are, their needs are similar:

Quality products and services;
Consistent and reliable service delivery; and
Fair and competitive pricing, offering excellent value for money.

While delivering on the above parameters prevents customer dissatisfaction, we believe that we need to go further to proactively create satisfactory experiences and growth for our clients. We view our customers as partners and strive to add value to their organisations in any way possible, through:

Optimising and technologically enhancing their business processes to reduce operating costs;
Introducing new technology platforms to their businesses; and
Train and empower their staff to confidently use such new technologies.

We further empower our customers by leveraging our strong B-BBEE credentials to provide them with maximum points for preferential procurement for their B-BBEE scorecards.

How did we do in 2019

We leverage our technological know-how and experience as well as our global supplier partnerships with industry-leading suppliers like Dell, Microsoft, Plantronics, IBM and Cisco Systems to bring in disruptive new products, software and applications to the market to enable our clients to service their customers better, operate more efficiently and improve their profitability. Through our collaborative business model, we “adapt” successful implementations and apps from one industry vertical to another and empower our clients to become the “digital leaders” of their industries.

We are acutely aware of our clients’ needs and seek new ways to address their business requirements. A case in point is the introduction of ICT equipment rental solution, which can be positioned as an operating expense that allows predicted operating payments. ICT hardware is a costly acquisition for a company and requires substantial capital outlay while carrying the inherent risk of rapid obsoletion. On the other hand, standard finance lease and asset purchase facilities are recorded in the balance sheet as financial debt, which potentially drains credit facilities. AYO’s rental solution removes the inherent costs, thus freeing the client’s financial assets while simultaneously manages the technology asset risk associated with ownership.

Our expert managed services teams provide on-site support to customer’s entire staff compliment in their office or site, while significantly reducing the cost and complexity of hiring and managing an in-house IT support team. Further, our clients’ staff and business as a whole, benefit considerably from the continuous training we provide to our employees. At the end of the financial year, AYO had 116 certified skills amongst our on-site teams by global providers, including Cisco Systems, Panduit scalable network infrastructure and cloud management service providers. Through daily interactions with customers’ employees, our team of experts transfers their specialised technical knowledge and informally contributes to skills development and further education of clients’ staff.

Looking ahead

We believe that training and developing our staff is of paramount importance to the value we create for our clients and will continue to emphasise both technical and customer service training going forward.

In 2020 we aim to further promote collaboration between the business units within the Group. This will enable us to introduce more innovative solutions and applications that have successfully been applied in different industries to our clients. We also look forward to rolling out an informative and educational social media campaign which will introduce the latest global technological innovations to the South African business community and provide technical commentary and guidance of the potential applications for these new technologies. This, in turn, will upskill and empower our clients.

In terms of product innovation, our focus for the short and medium-term will be in the digital space, particularly the Internet of Things (IoT), wearable technology and cloud computing, which will introduce exciting new services and opportunities to create value for our clients.

SOCIETY: Contributing to a thriving society

At AYO we believe that the most significant contribution business can make towards the sustainable development of society is through education. Subscribing to the “teach a man to fish” philosophy, we strive to create opportunities within the technology learning spectrum geared up towards previously disadvantaged communities and in doing so, we aim to uncover, nurture and develop the future leaders of South Africa’s technology realm.

Further, we recognise that access to real business opportunities is one of the most significant barriers to entrepreneurship and community upliftment in our country. Our enterprise development efforts are thus geared to support small and starting businesses, which we acknowledge as the trailblazers of sustainable economic growth.

How did we do in 2019

Access to education in South Africa historically has been unbalanced and it is our duty as a good corporate citizen to address such disparities and create equal opportunities for all communities. Through our investments in socio-economic development, we aim to support a broad spectrum of beneficiaries across race, age, gender and regional demographics. We also strive to achieve a balance between creating opportunities for people, which have quantifiable immediate results and investing in infrastructure and capacity building that will benefit entire communities over sustained time frames.

Educational initiatives we supported in 2019 include:

Innovation and Space Tour Expo: An i-Innovate and Sakhikamva Foundation initiative aiming to inspire young learners’ interest in science and technology, develop essential technical and 21st-century skills and nurture their resilience to obstacles and failure. In an interactive environment under the guidance of a renowned NASA space astronomer, students got first-hand exposure to the role of technology in addressing critical global challenges such as climate change.
Techno-Girl Campaign: A comprehensive programme led by the Department of Telecommunications & Postal Services focusing on developing female talent in the male-dominated STEM (Science, Technology, Engineering and Mathematics) fields. Through Techno-Girl socio-economically disadvantaged girls are exposed to sustained (over three years) opportunities to acquire the technical and soft skills required in the world of work.
QASA Work Readiness Programme: A training project by the QuadPara Association of South Africa providing computer, business, leadership and soft skills education to people with disabilities to enable their access to employment and empower them to become value-creating members of society.

Additionally, AYO contributed more than R3.5 million to the technical infrastructure needs of schools across all nine provinces in joint CSI projects with SAME Foundation, Masinyusane Development Organisation and Joyful Computer Literacy.

Aligned to our commitment to advance job creation and thus empower communities from within, we have opened opportunities in our supply chain to black-owned suppliers and small enterprises. We have revised our preferential procurement and supplier development policies to support transformation and inclusion. This supports our drive to deliver sustainable value to all South Africans, and contribute to a thriving society.

Looking ahead

Creating value for our society through education and opportunities for marginalised socio-economic clusters is a business imperative for the AYO Group. We will continue to support initiatives that empower historically disadvantaged groups to restore balance in our society.

What our staff have to say

Pride Guzha CA (SA)

Group Financial Accountant

“AYO is a highly empowered Group with a lot of diversified offerings in the ever-growing ICT space, which makes working here exciting and challenging. The organisation offers young professionals from different cultures and backgrounds opportunities to shine in their various areas of expertise. I feel honoured and privileged to be part of the team that is making history in the South African ICT space. I enjoy the team spirit and collaborative environment in the business. History will never be erased.”

Jaco Steenkamp

Manager: Field Service

“As a seasoned network professional, I have been involved in all aspects of networks, including operational support, management, architecture and project management. The opportunity AYO affords me, all the exceptional employees and the business drive to “disrupt” legacy network service offerings in South Africa is truly a motivator to support and grow this business into one of the leading ICT companies in South Africa. Looking forward to all the new business and penitential acquisitions going forward!”

Andisa Munungufhala

Junior Assistant in the Executive Office

“My time at AYO Technology Solutions has been nothing short of amazing, coming in so inexperienced and so nervous as for me, this is the first big corporate company to work for. Adapting to this new environment was not easy. However, I was granted the opportunity to sharpen my skills, grow and enhance my confidence through various training courses together with the amazing support from management and colleagues. In this work environment, I am inspired to better myself and grow not only in my current role but also aspire to reach greater heights.”

Shay Haripersad

Manager: Service Desk

“Working as an IT Service Desk Manager at AYO Technology Solutions Limited is the most gratifying experience in my career journey. It is indeed a great honour and privilege to be part of this ICT company, and what I love the most is the collaborative environment. There is a genuine spirit of cooperation, support and a common goal all revolving around delivering a world-class service, with value, to the customer.”

Sello Maila

Field Service Engineer

“My journey in AYO has been an incredible roller coaster of self-realisation. In the short time since joining AYO, I have learnt a lot about myself and grown confident in my capabilities. I am now surer than ever of who I am and where I am going. From intern to project administrator I have now become a field service engineer and have never felt such sense of belonging. The culture and values of AYO bolstered my personal growth. The people I work with make it worthwhile and man, do I love my JOB!”

Lesego Masite

Finance Manager

“It’s exciting to work for an organisation which is serious about closing the digital gender and race gap and advancing economic development in the ICT sector. The rapid changes and continuous technological advancements in the ICT sector enable AYO to drive the development of black professionals in ICT by providing them with ICT workplace exposure, skills growth and accelerated learning.”

INTEGRATED
REPORT 2019

Value for stakeholders

What our staff have to say