AYO to miss forecasts on contract delay. The technology holding company will report higher earnings for the year but will miss its pre-listing forecasts.

Ayo Technology Solutions has flagged a strong rise in full-year profit but says it will fall short of its forecast for the year.

In a further trading statement yesterday, the tech business that was spun out of African Equity Empowerment Investments (AEEI) and listed on the JSE last December said net profit for the year to end August would be up to 870% higher than last year. While basic earnings per share (EPS) would be up by as much as 574% it would be well below the 242.68c it forecast when it listed. Similarly, an 856% increase in HEPS would miss its forecast by between 77.7% and 80.4%.

AYO said a contract with a multi-national company, scheduled to start earlier in the reporting period, had been delayed until the latter part of the financial year. However, it still incurred once-off costs as it prepared to implement the contract. Earnings were also affected by acquisitions that were not concluded within the expected timelines, it said.

One such acquisition, announced in September, was for a 55% stake in investment holding company Zaloserve, which ultimately owns Sizwe Africa IT. It paid R165 million for the Zaloserve stake. AYO says Sizwe generated over R1 billion in revenue last year and reported cash from operations of R75 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of R70 million.

AEEI is controlled by Iqbal Surv and his Sekunjalo Group. The Public Investment Corporation was the sole participant in December's IPO, investing R4.3 billion for 99.8 million shares in the group at R43 each. The 29.9% stake bought by the PIC valued Ayo at R14. 8 billion on its listing.

Its shares closed 4% higher at R24.95 yesterday in two deals, valuing the company at R8.59 billion.