4Sight, a diversified technology group, today announced strong results for its financial year ending 31 December 2020.
The group’s revenue rose 6% to R522 million, and a recorded decline of 0,1% in gross profit margin from 53,7% to 53,6% (from continuing operations, i.e. excluding Digitata, which was disposed of during the reporting period).
Profit after tax on continuing operations improved by more than 100%, achieving a net profit after tax margin of 5,6% as compared to a loss in the previous reporting period (in USD).
The group’s operating expenses for continuing operations for the year decreased by 7.9% compared to the prior year (in USD).
Despite tough trading conditions, 4Sight said it was also able to increase its cash balances by 41.9% to R66.3 million.
Cash Flow from operations rose by 37,4% to R 38 million.
Its debt-to-equity ratio has also declined significantly, from 45.8% to 30.8%, an improvement of 32.7%.
“These results would be pleasing at any time, but in the current circumstances they are nothing short of stellar—a massive vindication of the strategic direction set by the board and the effective implementation by the executive team,” says Tertius Zitzke, CEO, 4Sight.
“I am also delighted to report that the group’s financials received an unmodified review from its external auditors. I am confident we are on track for an unqualified audit when our annual financial statements are released in April.”
4Sight’s new business strategy is founded on five pillars, also referred to as the 4Sight digital transformation business DNA: People, Customers, Operations, Finance and Innovation.
Despite 2020’s lockdowns, the Group was able to continue investing in its people, which it sees as its key asset—the Group has a unique mix of rare IT, financial and engineering skills that underpin its ability to deliver genuine digital transformation initiatives in support of the convergences between Information Technology and Operational Technology.
During the reporting period, employees (People) received their annual salary increases and the employee complement increased by 20%. A continuing drive to upskill employees continued; as a Microsoft Gold Partner, 4Sight has one of the highest Gold certified competencies in the Middle East and Africa region, with 11 new Gold and three new Silver competencies, including DevOps, Security and Messaging.
In addition, 4Sight is also in the process of completing three advanced specialisations for Adoption and Change Management, Windows and SQL migrations and App Modernizations.
When it comes to Customers, the new customer-first approach linked to the overall business strategy is paying off.
“4Sight moved into 2021 with a strong rolling 12-month sales pipeline,” says Willie Ackerman, Chief Sales and Marketing Officer.
“We grew our annuity-based revenue from 49% in 2019 to 56% in 2020, and we aim to reach 70% in the next two years. In part, this will be achieved by our focus on deepening our relationship with our existing customer base.”
Operationally, the group was able to dispose of non-profitable and non-core businesses during the reporting period. It has now been structured into four operating clusters supported by a centralised shared services centre, creating economies of scale and optimising the value delivered to customers.
“4Sight continues to invest up to 33% of its profit after tax into innovation and acquisitions that align with its strategic direction. This represents an investment in the Group’s future relevance and profitability”, Zitzke says.
“Our strong cash reserves, reduced Debt-to-Equity ratio and growing proportion of annuity-based revenue are powerful growth levers, especially when combined with our successful go-to-market strategy and the universal move towards digital transformation.
“4Sight is positioned to play a leading role in the digital revolution now underway, and we expect our ambitious growth targets for the next three years to be achievable.”