Iqbal Survé’s R50bn grand plan for Ayo

Share price ‘should reach R100 within three years’, he tells PIC Commission of Inquiry.
Survé’s bold vision could come to fruition, not least of all because of the largesse of the PIC. Picture: Shutterstock

Testifying at the Commission of Inquiry into allegations of impropriety at the Public Investment Corporation (PIC), Sekunjalo founder Iqbal Survé rendered a spirited defence of the PIC’s R4.3 billion investment in Sekunjalo subsidiary Ayo Technology Solutions.

“The PIC has not lost any money on Ayo,” he said. “It is true that the share price has dropped. Let’s look at the fundamentals of the company. The results came out on Monday, the results are exceptional.

“If you extrapolate that performance to the full year’s performance [to August 31, 2019], you are looking at revenue for this year of about R2 billion, and for profitability, you are looking at R600 to R700 million. That is in spite of all the negativity.

“If you put a multiple on that you get to a multiple of about R15 billion, and if you look at it a year later Ayo will have profitability of R1.2 to R1.3 billion.

“If you take a PE [price-to-earnings] multiple according to the PIC’s own multiple [of] 16x to 30x … if the PIC supports its own investment in Ayo, the share should reach R100 within the space of three years, which means that the PIC will triple its investment in the space of five years. That is superb.”

Ayo’s share price

“You know, we build industrial economies,” he added. “We take a long term view of our investments, and that is what we are doing.

“As chairman of this group [Sekunjalo Holdings], no one is here for a quick buck, we are trying to build the South African economy. And I am comfortable that Ayo’s market capitalisation will reach R30 billion to R50 billion in the next three to five years.

“All other companies have significant debt.

“Ayo does not have debt.”


Highlights from the unaudited interim results for the six months to February 28, 2019 (compared with those for the same period in 2018)

Revenue up from R349 million to R675 million

Profit before tax up from R82 million to R267 million

Earnings per share up from 17.68c to 56.65c

Headline earnings per share up from 17.36c to 56.67c

Assets grew from R4.5 billion to R5.2 billion

An interim dividend of 35c per share was declared for H1, 2019


For greater context – the audited full-year results for the year ended August 31, 2018


R639 million

Profit before tax 

R196 million

Earnings per share


Headline earnings per share



R4.6 billion

A dividend of 30c per share was declared for FY 2018


The Ayo Group employs 1 400 people and has over 500 clients, with operations in South Africa, Mauritius, East Africa and the UK.

Ayo secured a contract with an undisclosed multinational that commenced in July 2018 and resulted in significant organic growth during the interim period. With work progressing well  and positive feedback from the client, Ayo expects to obtain new contracts with other multinationals.


In addition, since its listing Ayo has made a number of acquisitions.

These include:

* A 55% stake in Zaloserve on December 19, 2018 for a consideration of R165 million. Zaloserve is an investment holding company that holds 100% in Opiwize, which in turn holds 100% of Sizwe Africa IT. Sizwe offers various ICT services and has annual revenues in excess of R1 billion.

* A 40% equity interest in Saab Grintek Technologies, now known as SGT Solutions, on February 9, 2019 via special purpose vehicle Mainstreet 1653, which in turn holds the entire equity interest in SGT Solutions. Annual revenue is in excess of R400 million.

* A 32% shareholding in Bambelela Capital (previously Vunani Group) on September 16, 2018. Bambelela has a 50% stake in Vunani Ltd, a diversified financial services group. Bambelela generates profits in excess of R40 million.

* On September 28, 2018, Ayo subscribed for 261 343 070 cumulative, redeemable, non-participating, convertible Class C preference shares of no par value in Bambelela for a consideration of R145 million.

Ayo is reportedly in the process of finalising certain key projects and transactions and will make further announcements in due course.

Cash flow

Cash and cash equivalents amount to R3.6 billion, and goodwill and intellectual property to R169 million.

The cash generated from operations before working capital changes for the six months is R276.7 million, and the loss generated from operations is R92 million. Finance income for the six months is R141.8 million. A net amount of R628.4 million was utilised on investing activities. The negative cash outflow for the six months is R728 million.

Contingent consideration

Ayo is required to pay the previous shareholders of Zaloserve a cash amount of R5.5 million a annum for the next three years provided that Zaloserve meets certain profit-after-tax targets.

The fair value of the contingent consideration arrangement was determined at the acquisition date and included in the consideration. The target is based on net profit after tax meeting certain thresholds. The payments are discounted at a rate of 15.78%.                                                                               

Events after the reporting period

* On March 1, 2019: Ayo acquired a 24% equity stake in Global Command and Control Technologies (GCCT) for R3.6 million.

* On March 19, 2019: Ayo signed an agreement with Bambelela and Vunani Capital. Ayo will hold 50%, Bambelela 30% and Vunani Capital 20% in a special purpose vehicle, to which Ayo will provide a loan of up to R100 million. 


Ayo is focusing on three areas: disruptive IT platform services, digital transformation, and specific industry vertical expertise.

This will be done through:

* Ayo Platforms (data, network, communications and security services through on-premise, hybrid and cloud solutions)

* Ayo Digital Intelligence (internet of things, platforms, big data analytics and artificial Intelligence), and

* Business process innovation and transformation skills.

The grand plan

Ayo has a lot of money to play with and is rapidly acquiring companies to support its vision of being the next Naspers or Alibaba.

Or is this Survé’s vision? 

He does not serve on the board of Ayo, or even its parent African Equity Empowerment Investments (AEEI). The latter was known as Sekunjalo Investments Limited until 2015. It was renamed to avoid confusion with parent company Sekunjalo Holdings. 

Read: Survé eyes foreign listings for Sagarmatha

Sekunjalo Holdings went private, AEEI took Sekunjalo’s publicly traded status on the JSE, all investments other than the group’s stake in Independent News and Media SA (INMSA) were spun off into the renamed entity, and Survé reportedly stepped down from managing all investments held by the subsidiary so he could focus on the group’s media holdings.

With the ever-increasing convergence of media and technology in the intervening years – and even Naspers’s own evolution from a media powerhouse to a tech giant – perhaps his ambitions have changed.

No matter the identity of the mastermind behind the grand plan, it is not necessarily one that will result in profits or positive cash flow.

Meanwhile, the PIC will have to be content with its interim dividend of 35 cents per share and the warm fuzzy feeling that comes from knowing that, due to its largesse, Ayo is proudly debt-free.

Read: Can Ayo deliver, that is the question




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Part of the plan is possibly to get the PIC support in the bid to take over EOH perhaps? I hope the PIc expend as much energy and concern on their investment in Tongaat! The silence on what happened to this company is deafening. Or would highlighting another Corporate / Accounting failure be just too much for the JSE to bare?

AYO’s share price graph shows otherwise.

Just don’t let the pensioner’s money be used to buy ANYTHING at above market prices ever again and retrieve the pensioner’s money that was corruptly used to buy the shares at a three times inflated price.

Our Iqbal-Mandelas Pre teen aged doctor now blaming the whole planet for the failed listing and subscription at more than 3 times the fair value. Nothing will happen-nothing.The PIC is a playground for kleptocrats and will ultimately be used( together with private pensions) to bail out destroyed SOEs. And the sheep, bribed with basic income grants,government jobs, or BEE tenders will vote for more of this.

Utter rubbish the Ayo shares have dived from about R40 to R15 and the only reason it sits at R15 is that his brother in-law purchased at that price a while ago, nobody else will go near this stock. The current Bid Offer on Ayo stock is about 60c. This guy is delusional. Nobodies going near this stock, he lives in a dream world.

I must be very slow, so could someone please explain to me, how a company chairman, whose share price is down 65% over a 12 month period, (and at a share price of R15, but the first bid at R0.59 yesterday, which if there is even one share traded at that price, would mean a 98% drop in share price,)
can glibly say that his biggest investor (who bought at R45 a share,) has not lost any money?! 1 – 1 = 3?

Also, when looking through the actual results, almost 60% of profit came from interest earned on the PIC money, before charges, means that this company made at best R50 mill before tax, yet he thinks a valuation of $10 billion (R145 Billion!!!) is justified, based on what “may” happen in the future.

Yes, and I just might win the $500 million US lotto next year, so you can give me $100 million now, and I will pay you back $200 million when I win next year?!
The really sad thing is he expects rational minded people to believe him, and even worse, is currently getting away with it. anc style…sigh.

Apologies correction there is a current bid offer for 500 shares at R4. And this delusional clown is taking about a R100 a share. I bet its down in the cents in the next 3 months.

Ole Bucktooth Survé is a slippery and evasive Walter Mitty character as well as delusional megalomaniac who seems to believe the strange fruits of his rollercoaster mind. Icky is trying to jump on the BEE band wagon as it’s self appointed crusader to cover his misdeeds in way way which fools no one. As his business empire is sinking ever deeper into the mire of bankruptcy, so his utterances become more bizarre and disjointed. Can’t wait to see him wandering the Waterfront with a cardboard sign and polystyrene cup – after he’s served his sentence that is.

The real question is whether the PIC’s decision to invest was prudent. Whether or not Mr Surve is right in his predictions about the share price is totally irrelevant. Anyone acting in a fiduciary capacity is duty-bound not to take the same risks with the fiduciary money than what you would be willing to take with your own money. That does not mean you must be overly conservative, but an investment in a start-up with no track record can hardly be regarded as prudent investment.

That question has been answered. They invested R4.5bn to effectively own 30% of their own R4.5bn thus donating R3.15bn to other shareholders.

Jeez that’s brutal. Didn’t know they only got 30%!. They’d still only be breaking even at this guy’s 30x multiple on non-existent earnings. Wow.

and guess who is the largest shareholder, even bigger than the PIC? Why of course, its Dr Itchyballs Scurvy himself. Paid himself R600 mill in divis last year alone, and now some more this year.

Uhm, when one values a company the Enterprise Value is of relevance not market cap.

So take market cap plus debt minus cash. So with say 5b market cap and with essentially no term debt and 3.6b cash, the business is valued at 1.4b

That is IF one places any weight on the 5b market cap as the share effectively does not trade. Value traded including what might be window dressing trades is R1m a month.

I wonder if they list their major clients anywhere?

Where I trained we were always trained to look at the jockey before the horse. This jockey is an inveterate liar and fantasist. Any discussion about the horse is now irrelevant (the horse looks fairly valued at about 60c a share though)

The last paragraph is the most telling: “Meanwhile, the PIC will have to be content with its interim dividend of 35 cents per share and the warm fuzzy feeling that comes from knowing that, due to its largesse, Ayo is proudly debt-free.”

One wonders how many billions Mr Surve has already taken offshore prior to his departure from South African shores?

The delusional doc must be best friends with Jooste.

Is there one company that Iqbal Survé has run or founded that has made money for shareholders other than Iqbal Survé? He uses his newspapers to promote himself, which should be a warning sign to anyone. He’s all bs talk and no performance. Buyer beware!

End of comments.




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