AYO Technology Solutions said yesterday it expected a subdued performance in the six months to February 28, with the basic loss per share expected to be between 29.22 cents and 31c per share.
The headline loss was expected to be between 24.19c and 25.99c per share, the group said in a trading statement.
The decrease in earnings was attributed to lower revenues for the six months, driven by the declining overall trading environment, the non-renewal of significant contracts, and a decrease in interest income.
“While AYO was not immune to the Covid-19-induced economic decline, which affected every business in South Africa, I am confident the group is in a solid position to weather this storm and continue on its growth trajectory in the second half of the year,” AYO chief executive Howard Plaatjes said.
According to a Statistics SA report issued earlier this year, “considering the full year of 2020, the [South African] GDP shrank 7 percent, the most since 1946.”
Plaatjes said this subdued economic performance had affected every business and industry in the country, including the information technology sector.
“With clients going into cash preservation mode and drastically reducing all non-essential spend, revenues for the technology group have declined, which in turn affects the earnings,” he said.
AYO’s strong cash position had seen the group report significant interest earnings in the past. However, these were also negatively affected in the reporting period, as the prime interest rate in the country sank by 275 basis points over the past year.