The reporting period was characterised by two distinct halves for our business with the COVID-19 lockdown having significant impact on operating costs and performance over the second half of the year. Strong organic growth of our strategic investments and operational excellence resulted in robust first-half results, with the Group reporting 95% increase in revenue and 25% increase in EPS and HEPS for the period ended 29 February 2020.

Soon after, however, the global pandemic shook our already fragile economy to its core and challenged business strategies, models and operations. In the face of these abrupt and extraordinary challenges, we took immediate steps to review our investment and cost structure, stabilise the business in the short-term and ensure we are well-positioned to weather the proverbial storm while gearing ourselves to deliver exceptional value to our shareholders in the aftermath.

Unlike many other industries whose operations were acutely disrupted by the pandemic, the technology sector appeared to be much more resilient. Technology has an essential role to play in supporting individuals and businesses to adapt to the “new normal” and we saw a marked rise in the demand for our products and services, particularly the unified communications and cyber security divisions, in the second half of the year. Yet, given future uncertainties, we expect to be negatively impacted by the anticipated economic downturn and reduced business spend going forward and focus on further diversifying our investment portfolio to ensure sustained future growth and deliver maximum shareholder value.

Thus, we undertook a purposeful and systematic review of our investment strategy and stress-tested our balance sheet under various best-case and worst-case scenarios to develop a comprehensive response plan that looks beyond the shortterm measures and positions the business for sustained value creation for all its stakeholders, including taking an important role in the country’s digital transformation.

Retaining and growing the value of our assets was our primary objective in this process. Our acquisition negotiations suffered unexpected delays with remote working protocols impacting on legal and financial due diligence investigations. Simultaneously, the business went into cash conservation mode focusing on business continuity and managing the operational cost structure to protect its traditionally strong cash holding position. Unfortunately, the reporting period also saw the implementation of five prime lending rate cuts by the South African Reserve Bank for a total of 300 basis points, which put pressure on AYO’s interest income and subsequently, overall profitability.

Notwithstanding the devastating effects of the pandemic, our hampered acquisitions and impaired interest earnings, AYO’s investment portfolio proved to be well-balanced and robust and all but one of the divisions contributed positively to the Group’s profitability.

This is a testament to the strength and soundness of our investment strategy and we are particularly proud of the growth recorded by our individual subsidiaries, despite the interruptions in their global supply chains and pressure on their operating efficiencies.

Beyond AYO’s acquisition advances, the pandemic had a disruptive effect on the overall investment market in South Africa, putting pressure on business valuations and dampening investors’ risk appetite. For the Group, this is the proverbial silver lining, as it allows us to intensify our acquisition endeavours in the near-term to make the most of the current investor’ advantageous climate and counteract the impact of depressed cash balance interest earnings.

Thus, our core focus in the next financial year will be on further expanding our investment portfolio into emerging technology sectors to fortify our already resilient Group and deliver sustainable profitability in the short-, medium- and long-term. I am firmly of the opinion that the ICT sector will be the primary driver for the country’s economic revival going forward and our stronghold in the industry allows us to play a crucial role in this important transition.

With our strong and balanced portfolio of leading technology players, we are able to benefit not just our internal stakeholders but also improve the lives of the South African community and drive the progress of Africa into a globally competitive economic powerhouse. Whilst there is a long road ahead, AYO’s solid strategic direction, strong financial position and prudent investment approach enable the Group to make the most of the current business environment to advance the country’s sustainability and transformation goals.

In closing, I would like to extend my sincere gratitude to my colleagues on the Board as well as the highly skilled finance team for their commitment, professionalism and support. It has been a pleasure and a privilege to work with you under these most challenging circumstances and I am certain that together we will rise above the challenges to report on many more successes in future.