Ayo dividends approach R1bn as its ‘cash-pile’ dwindles
Ayo Technology has declared an interim dividend of 35c per share, despite the group reporting a headline loss of R122m (35.9c per share) on revenue of R859m in the six months to 28 February.
The interim dividend totals R120.4m, but is more modest than the R223.7m (65c per share) dividend declared at the half-year mark in 2021.
In total, Ayo declared dividends totalling R326.9m in the last fiscal. It defended the large dividend declared in 2021 (65c interim and 30c final), telling Moneyweb that ‘Ayo has an established track record of paying dividends and decided to maintain its dividend despite a challenging trading environment’.
It says it retains ‘a significant cash balance’.
‘The board declared a dividend with the realisation that its shareholder base were largely pensioners who had not received much dividend income during the pandemic,’ it added.
In 2017, the PIC controversially invested a R4.3bn ‘cash-pile’ for a 29% stake in the technology solutions firm.
CEO Iqbal Survé’s family holding company, Sekunjalo Investment Holdings, has a majority stake in JSE-listed African Equity Empowerment Investments which in turn holds 49.36% of Ayo. As a result, Sekunjalo has indirect control over Ayo.
The PIC and the Government Employees Pension Fund issued a summons to Ayo in May 2019 which sought a declaration that the subscription agreement entered into by the PIC with Ayo be declared unlawful and set aside.
Moneyweb reports that Ayo instructed its attorneys to oppose the action and says ‘the matter is currently in discovery’.
The group last year earned R164m in interest. Of this, R96m was from its cash balances, without which its R200.5m loss before tax would have been 50% higher.
Separately, the Eastern Cape Department of Education, which is struggling to provide textbooks and stationery to more than 3 000 schools, has set aside nearly R1bn to cover the potential costs of a lease agreement with Sizwe Africa IT Group to supply 55 000 computer tablets to matric students.
The Daily Maverick reports that the company is owned by Ayo.
The tablets have been gathering dust since the beginning of last year after the three-year lease contract sparked an outcry.
In October 2020, in a case brought by the State Information Technology Agency (Sita), which alleged that the contract was unlawful and needed to have been processed through it in terms of the Sita Act, the department was interdicted from continuing with the R500m contract to supply the tablets to matric learners pending the hearing of an urgent review application.
The department, using Treasury regulations, participated in an existing lease contract between the Department of Economic Development, Environmental Affairs & Tourism and Sizwe Afrika.
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