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Ayo Technologies’ headline earnings per share (HEPS) will be about 80% lower than forecast in its prospectus, the investment vehicle of Independent Media Group proprietor Iqbal Survé said in a trading update on Tuesday.

Although EPS for the year to August is expected to rise to between 46,45c and 52,99c a share from 7,86c a share in 2017, this figure will be down from the 242,86c a share it predicated in October.  

The tech group said a delayed contract with “a multinational company” which commenced only in the latter part of the financial year was the main reason it would not meet its forecasts. It said the contract had gone well since its commencement.

One-off costs relating to this contract, and several acquisitions  that were not concluded within its expected timelines, also played a part in the expected fall in earnings. Ayo took a controlling interest in Zaloserve, a company that owns Sizwe Africa IT, for R165m in September.

This is Ayo’s first major deal since listing in December 2017 , and is expected to double its revenue. In October, it announced a R100m joint venture with financial services group Vunani to expand Vunani’s fintech platform and financial services activities.

Ayo Technology has revenue in excess of R1bn, strong cash generation with cash from operations of R75m, and earnings before interest, tax, depreciation and amortisation of R70m. The group’s shares closed up 3.95% to R2,49 with 2,001 shares traded in two deals.

Ayo said in October it planned to participate in the government’s long-delayed spectrum auction, using a portion of the R4.3bn it raised in December 2017 from the Public Investment Corporation.

The company would also be invested in “forward-thinking businesses that will use the frequency of these licenses for digitalisation, data and content”.

Ayo wöuld partner with small, black-owned information and communications technology (ICT) firms and multinationals for the bidding.

claasenl@businesslive.co.za

Correction: November 7, 2018

An earlier version of this article incorrectly stated that Ayo Technologies expected a decrease of 80.86%  in full-year basic earnings per share. In fact the company expects earnings to be lower than the previous forecast in its prospectus.