Puleng Technologies can once again report on a particularly successful year, despite having to navigate the business during the unprecedented times over the last six months. We continue to increase our revenue and profitability, underpinned by a strong balance sheet and cashflow.

Our core business in the User Security arena has been our strongest performer. Many clients increasingly recognize the importance of ensuring a secure digital experience for their employees, contractors, third parties and end customers. Puleng’s offering in this discipline is the strongest in the South African market with exceptional subject matter expertise and an experienced deployment and support team. We continue to make investment in this area to bring the next level of innovation to clients.

With the deadline looming for organisations to comply with the POPI Act, we have seen a significant increase in revenue from our Data Security business and have built a strong pipeline of new projects in the division. Our Application Security portfolio has great traction, as businesses compete to gain digital market share and roll out applications at a rate never seen before. Puleng is well positioned to assist these organisations to mitigate risk and go to market faster and most importantly securely.

We have made investments into our Infrastructure, Governance Risk & Compliance and Cyber Security business during the year. We are optimistic that these investments will provide the next level of growth and increase our market presence and new client acquisition in 2021.

I am proud of our team’s ability to continuously deliver and of their “can-do” attitude during these extreme circumstances globally. I appreciate and sincerely thank each and every one of them for their dedication, passion and professionalism. A special thank you is also due to our clients, vendors, partners, and suppliers for the tremendous support during 2020.

Muhammed Mayet

Chief Executive Officer

Puleng Technologies

Health Systems Technologies (HST) had a reasonably successful 2020, managing to meet and marginally exceed budgeted expectations for the financial year, despite the COVID-19 pandemic and a market outlook that is still adversely impacted by negative publicity.

Our South African operations for the second half of the reporting period focused heavily on COVID-19-related integrations. Since the 1990’s HST has been the official technology partner of the National Health Laboratory System (NHLS). With the onset of the pandemic, however, NHLS did not have the capacity to process the vast volume of PCR tests and sought to integrate its testing and reporting capabilities with the numerous private laboratories operating nationwide. This posed a technological challenge, as each lab uses its
own software system, and consolidating results proved problematic. HST implemented a total of 28 integration projects during the period, to enable the real time consolidation and reporting of test results and national statistics. In addition, we also provided the software infrastructure for the two COVID-19 temporary hospitals in the Western Cape. These projects were completed in record time and at no cost, as HST’s contribution to the nation’s fight against the pandemic – an achievement we are particularly proud of.

In pursuit of product and services diversification, HST signed a distributor agreement with AGFA Healthcare, for the supply and implementation of Enterprise Imaging Solutions for radiology and has established a new business unit to grow this exciting opportunity, complementing our existing range of products and services. We remain committed to developing “proudly South African health IT products”, which will be marketed on the African continent at large. The first module, being an Enterprise Master Client Index, has been completed and we look forward to take it to market in the upcoming period.

The outlook for 2021 is subdued, following the loss of a major customer. Retention of existing customers remains a challenge, whilst establishing new customers is proving difficult in the South African environment. Nevertheless, our Nigerian operations managed to build on the momentum gained in the previous period, and the outlook for the short and medium-term from our African operations remains positive.

HST will endeavour to mitigate for these aspects outside of our control by marketing a portfolio of advanced health information systems that adds real value to healthcare enterprises at both administrative and clinical levels.

Gerrit Henning

Chief Executive Officer

Health System Technologies

2020 was a bittersweet year for Headset Solutions, influenced heavily by the impact of the COVID-19 pandemic. While demand for our equipment surged with the rapid implementation of remote working protocols nationwide, we experienced stock shortages as suppliers’ factories worldwide were shut down and logistics proved challenging. Nevertheless, we still managed to grow revenue by 32% in the financial year, which is a significant achievement in the current economic climate.

Headset Solutions onboarded two new product ranges, namely PolyCom Audio and Video and Jabra Audio and Video, in June 2019. These two new brands represented 32% of the FY20 revenue stream – a much faster growth than anticipated.

Advancing our B-BBEE score is a key priority of Headset Solutions and we managed to achieve a level 3 BEE rating (up from level 4) on the new industry codes. We acknowledge black ownership and the associated procurement points as a major factor driving supplier purchase decisions within our target market and will endeavour to maintain and further improve our scoring in the future.

Headset Solutions believes that making a difference in education is critical for the future of South Africa. Our investment in supporting initiatives within the school system has seen us spend approximately R700,000 per annum for the past 5 years. In the past 3 years, Headset Solutions has offered 32 bursaries to students in disadvantaged schools. In 2020, 5 bursaries were offered, enabling
underprivileged youth to gain access into the world of work. Headset Solutions also offers learnerships and internships to disadvantaged students, which run for a year. At the end of the year, we either absorb these students in permanent positions in our company or find placements for them in other businesses.

In August 2020, Headset Solutions donated 6 laptops to Simanyene High Scrool. Each laptop came pre-loaded with Microsoft Office to give learners the tools, not just for their learning, but to also develop skills which would stand them in good stead for the future. These 6 laptops form part of Headset Solutions’ commitment to donate 40 laptops.

Headset Solutions’ outlook for 2021 is optimistic, despite the challenges faced in the past financial year, and we look forward to report on many successes in the upcoming period.

Tony Brown

Chief Executive Officer

Headset Solutions

Sizwe Africa IT Group had a good year (2020) in that we met ourfinancial targets despite facing a few challenges along the way:

While our business continuity processes were in place and we continued to service key clients during the lockdown, we were affected by the impact of COVID-19, which resulted in decline of clients’ spend during the second half of the financial year.

We continue to lose contracts due to the residual adverse media sentiment to AYO as a shareholder. The executive team is hard at work, planning the shift in focus from a service business to a revenuegenerating company focused on new markets, as our existing clients are closing their doors on us. The effect of the lost tenders is evident and will affect our operating profit and cash flow in the months to come. It is with a sad heart that I report on retrenching 204
employees to date due to lost contracts.

Our pipeline for 2021 is driven by partnerships that we anticipate will lead to bigger opportunities to mitigate the current challenges. We will continue to build the Sizwe brand as a “partner of choice”, as well as diversify our portfolio through new products and service offerings. We will endeavour to keep the best technical skills and retain client partner certifications as critical enablers to the growth of the Group. Maintaining our stellar level 1 B-BBEE rating is also a priority.

Early results of our diversification strategy are optimistic. Our new service offering, CyberAntix (Security Operations Centre) has onboarded its first client and we are working on a pipeline to attract more clients and grown this division, focused on enterprise security. The team is finalising the last details and integrations of the Sizwe Cloud Hosting and Online Platform, which will go live before year end. A few clients have been onboarded already.

The Group continues to be fully committed to a transparent and disciplined governance process and complies with all requirements and material aspects as set out in the King IV™ Code.

Hanno van Dyk

Chief Operating Officer

Sizwe Africa IT Group

In 2020 Afrozaar experienced a decline in revenue, although we achieved 20% more revenue than budgeted.

Between the struggling global publishing industry and COVID-19 pandemic, there was a significant slow-down in our pipeline opportunities. The investment made to date into the UK and global markets to establish a business network, in-country office and team representation is showing initial signs of confidence in the strategy applied. We will further focus on developing this international operation in the upcoming year.

Afrozaar’s strategic expansion plans were suspended and managed conservatively from March 2020. Through aggressive management of costs and client accounts in arrears, the year end result was ahead of PBT expectations.

All key accounts have reduced their spend, with some publishing accounts unable to renew their licenses, thus justifying and supporting the team’s strategy to focus on new markets, namely global events and sport. We have already managed to secure two new accounts based in the newly targeted markets in the UK and US, during the period of global lockdown, which is an exceptional achievement.

Afrozaar’s UK subsidiary Publisher’s Toolbox digital product ecosystem continues to evolve and mature with each implementation. We have successfully pivoted the platform to the sports market, where exciting growth opportunities being pursued. Thus, we are cautiously optimistic for the 2021 financial year with projected growth driven by international expansion and innovative applications of our proprietary technologies.

Richard Cheary

Chief Executive Officer

Afrozaar

SGT Solutions has been able to succeed in delivering strong results despite a turbulent year. Overall sales volume has declined, but careful cost reduction and tight project execution have resulted in good profitability despite the circumstances.

The most obvious reason for the turbulence of the past financial year is the COVID-19 epidemic, which has caused so many disruptions to the economy. In SGT’s case, the telecommunications industry was declared as delivering an essential service, which was critical to being able to sustain the company despite the disruption of working-from home and other lockdown rules. SGT did experience a downturn in volume during lockdown, with major customers experiencing delays in internal processes due to the pandemic, as well as budget cuts in anticipation of the economic downturn. This lead to pressure on
communication spending by consumers and businesses alike, thereby impacting on budget decisions for the network operators.

On the positive side SGT has been able to gain market share in most of its business segments during this tough time, which has positioned it well for the upcoming recovery period. This is evidenced by deeper penetration of its synchronisation solution into MTN Group (winning a crucial Group tender) and winning the order to refresh the voice and data monitoring technology in Vodacom. Our field services have similarly been able to show an improvement in market share for installation services for the telecoms network operators.

For the year ahead, we believe that the recovery of the SA economy as a whole will lead to opportunities for expansion into more areas of business, assisting in the growth path for SGT. The company has identified the following key focus areas with strongly positive prospects:

– Expansion of field services into preventative maintenance
and monitoring as well as specialised engineering services;
– Network build in specialised technologies, such as satellite
networks and secure radio communication;
– Introduction of cloud-based RAN solutions in the local
market; and
– Expansion of SGT’s customer base for vandal-proof security
containers for the protection of batteries and other equipment at
cellular base stations.

Our overall outlook for 2020/21 is cautiously optimistic, despite very
competitive and turbulent market conditions.

Dr Vincent Scholtz

Chief Executive Officer

SGT Solutions

The past financial year has been materially affected by the worldwide COVID-19 pandemic. Digital Matter, like most companies, has been significantly impacted and while we expect the negative consequences of the pandemic to linger for years to come, in the short-term, Digital Matter managed to navigate the year reasonably well under the circumstances.

Sasol is an important anchor client for Digital Matter. Due to macroeconomic and operational setbacks, including the global drop in oil price and a cost overrun on a mega project in the USA, Sasol implemented a severe cost cutting and cash preservation initiative in the second half of the year. Digital Matter lost a significant Rail Tracking project as a result. Spend in general at Sasol has been reduced and this greatly impacted our revenues for the financial year.

Despite all key accounts and customers reducing, limiting and temporarily suspending their spending, Digital Matter did manage to meet revenue budget, and with some very aggressive cost management through control of overheads and negotiations with suppliers Digital Matter manged to end the year ahead of budgeted PBT.

Looking forward, in 2021 we will focus on retaining and rebuilding revenue and project work at Sasol and expanding the tracking offerings and customer base. Revenue pressure and committed operating costs, coupled with the ongoing uncertainty of the COVID-19 aftermath, have dampened our optimistic projections. We are bracing for a breakeven target in 2021 with expected reduction in revenue, COS and OPEX.

Jeremy Williams

Managing Director

Digital Matter

2020 saw GC2T continue to pursue its diversification strategy adopted previously. The goal is to maintain 70-75% of income/ revenue derived from defence exports and non-defence contracts. This revenue mix allows the company to fulfil its strategic and sovereign capability mandate, while being able to grow into new market segments with existing products and services.

South Africa is still facing severe defence budget cuts, and these have affected GC2T’s revenue locally. Although the country’s economy suffered harsh negative consequences from the COVID-19 outbreak, it had the opposite effect for GC2T. We managed to secure additional work with the DoD through broader roll-out of the Chaka Command and Control capability for multi-departmental joint operations. However, the closing of borders and lockdown all over the world hampered our ability to deliver hardware and meet our
milestones for export business, as well as delayed import logistics of subcontracted materials.

GC2T’s initial 2019 profit figures were adjusted to accommodate specific international accounting standards, which resulted in overall loss of R10.1 million for the 2019 FY. GC2T would have realised a profit in 2020, had COVID-19 not delayed the delivery of international milestones to the African Union. While our operating losses of R3.04 million in 2020 are definitely a step in the right direction, our focus is firmly on turning our profitability around going forward. We have embarked on an organisational restructuring process, with a view to reduce OPEX by 18% and salary bill by at least 20% to ensure financial viability and long-term sustainability.

The new fiscal year will see GC2T undertake further market diversification efforts and pursuing more export opportunities. We aim to rapidly expand the brand into the African market. The sovereign capability status of GC2T brings close alignment with the South African government and is also opening doors to additional government departments and the planned Border Management
Agency. The company has been successful in entering non-defence market sectors including application of Command and Control in a format, that is applicable in the civilian space. GC2T continues to drive expansion into other potential market segments, such as public health, safety and security through market partnerships and public-private initiatives.

Ratilal Rowji

Chief Executive Officer

Global Command and Control Technologies