AYO grows revenue thanks to new contracts - but loss still more than doubles

AYO Technology Solutions, part of the Sekunjalo Group, said on Wednesday its push for new contracts helped lift revenue more a quarter in its 2023 year, but its loss still widened in part due to taxes, and it has held onto its dividend.

Revenue rose 28% to R2.3 billion in the year to end-August, but its loss widened to about R640 million from R266 million, with the JSE-listed group hit by, among other things, a fall in profit margins, lower fair value adjustments on investments, and a VAT adjustment as a result of apportionment difference with the South African Revenue Service. The group opted not to declare a dividend, having paid 60c per share in the prior year.

The group reported a VAT apportionment of R126 million, saying that some expenditure was disallowed by the tax authority, given that it was earning more interest as compared to revenue. This refers to the ability of a company to make claims on the tax it paid on inputs, when, for example, creating taxable new business, something that helps ensure there is no cascading tax effect.