4Sight banks on AI, international expansion for growth

Full-year HEPS more than doubled.

Johannesburg, 27 Feb 2024
From left: Chief Financial Officer, Eric van der Merwe, Group CEO Tertius Zitzke, and Willie Ackerman, Chief Sales and Marketing Officer at 4Sight Holdings.
From left: Chief Financial Officer, Eric van der Merwe, Group CEO Tertius Zitzke, and Willie Ackerman, Chief Sales and Marketing Officer at 4Sight Holdings.

Technology group 4Sight Holdings is banking on artificial intelligence and international expansion for growth, the group said on Monday.

4Sight, which traditionally invested in technology, telecommunications and media sector companies, had a board shake-up in October 2019, when four directors resigned and seven new ones were appointed.

The public fight and the JSE's suspension of the company for late submission of results led to reputational damage that the new executive team is fighting to repair. Its stock fell to a low of 16c per share at the time. The AltX-listed company has since recovered and now has a R513 million market capitalisation.

As the group reported full-year earnings to end-December, management highlighted ongoing efforts to grow outside SA and the importance of AI to its strategy.

The group said its partner network, through which it sells products and services, grew 12.5% in the period, as it added 100 partners and reached 55 countries. It had put in place focused initiatives to assist those partners “in delivering continued growth and expansion in their regions”.

CEO Tertius Zitzke said 4Sight had supported this continent-wide growth while it had contained the overhead costs that typically accompany cross-border expansion.

“The ability to remotely service multiple countries from SA and deploy projects to customers internationally has contributed massively to our success,” said Zitzke.

The group has taken a big bet on AI, incorporating features such as ChatGPT into some of its platforms for enterprise clients.

“Our future investment into technologies for 2024/2025 is aimed at the current developments in AI technology. Our diverse solution offering and expertise in automation, data analytics, cloud computing and industry 4.0 technologies are helping to drive the digital-led innovation agenda in the corporate and industrial business environments across Africa, particularly within early-adopter industries such as mining, metals, manufacturing and finance,” Zitzke said.

The company’s business is made up of four units: business environment, which saw its operating profit fall 22% for the period; IT, which more than doubled operating profit from R12.9 million to R26.8 million; operational technologies, which grew operating profit by 54%; and the channel partner cluster, which saw a gain of 34%.

Overall operating profit grew by 70.6% to R37.7 million.

Revenue increased 34.9% to R939.2 million, while headline earnings per share – which strip out the effects of one-off financial events – more than doubled to 5.42c from 2.379c.

Finance chief Eric van der Merwe said 4Sight had been able to weather a weakening rand.

“4Sight has major exposure to dollar pricing, but with good management and our pricing policy, we had zero foreign exchange losses in the 2023 period. We also managed cashflow with proper financial controls in place, which supported cash growth of 44.8%.”

The group ended the period with a cash balance of R70.3 million.

A thinly traded stock, 4sight shares were flat on Monday at 96c. Over the past year, the stock is up 242%.