Johannesburg, 05 Apr 2022
The three-year business strategy that 4Sight Holdings (JSE AltX: 4SI) established in 2020 continues to deliver strong results, with the company reporting a second straight year of double-digit growth in revenue.
“The continued commitment from the Board of Directors and the Executive Committee in the execution of our strategy has sustained top line growth during 2021,” affirms Tertius Zitzke, Group CEO at 4Sight Holdings.
4Sight has achieved a 12.9% year-on-year increase in revenue and 3.6% in gross profit, with basic earnings per share increasing from ZAR 1.329 to ZAR 1.695 cents per share. A further improvement being the notable increase in debt-to-equity ratio to 36.4% and net asset value climbed by 3.5%.
“The company also posted a slight improvement in normalised earnings despite the tough trading conditions experienced during the period under review, which includes spend on talent management initiatives focused on retention and training of skilled and scarce human resources,” adds Eric van der Merwe, CFO at 4Sight Holdings.
“Countering the brain drain in South Africa to retain industry and domain skills and expertise remains a key focus for the group. Our learning programmes will help solve the skills gaps in our industry, and 4Sight will become the first place people will turn to learn more about careers, develop new skills, retrain for new positions and sharpen their skills.
According to Van der Merwe, the IT sector needs to meet foreign currency earning potential; rand-denominated RSA resources will continue to escalate costs as more global companies target the South African workforce to tap into the talent pool's skills base and renowned work ethic.
4Sight also made key strategic appointments over the period that continue to support the company's growth objectives and bolster the company's established leadership base and proven go-to-market strategy. Talent is the key ingredient for delivering our partner engagement and delivery.
“Attracting an experienced Chief Operating Officer, Tracy Short, from a JSE-listed freight transport company has helped to streamline operations and boost organisational performance. A shared services model has been introduced to provide support across the business at a lower cost, with higher quality and reliability, while standardising and harmonising processes, which are supported by advanced technologies,” states Zitzke.
The company's dual direct and indirect channel strategy continues to positively impact performance, with 4Sight Holdings ideally positioned to meet customer and partner needs amid the rising demand for digital transformation expertise and solutions across multiple sectors.
“Our direct channel targets tier one and tier two customers while our growing network of over 650 channel partners support our indirect market offering,” explains Willie Ackerman, Chief Sales and Marketing Officer at 4Sight Holdings.
The mining sector in particular remains a rich source of revenue as companies take advantage of the commodities boom to invest in digitalisation initiatives that optimise operations through automation and data visualisation.
Additionally, 4Sight Holdings experienced strong vertical industry growth in the manufacturing, government and education sectors over the period.
“We have a solution for every sector and our industry-specific experience and expertise ensures we deliver within each vertical,” affirms Zitzke.
“We also scale our offerings through a cross-selling strategy that utilises key account management principles to exploit synergies across our clusters,” explains Ackerman.
“Our ability to cross-sell using our Business Environment Cluster as the conduit maximises value and share of wallet from our customer and partner base, while building long-term relationships and roadmaps for digital transformation and decision-making.”
The new 4Sight BE Cluster grew revenue by 16% and delivered a ZAR 2.6 million profit from a loss of ZAR 2.7 million during the corresponding period in 2020, which was seen as the “investment for growth” year, focusing on developing our own Intellectual Property, supporting the delivery and optimisation of our clients’ digital assets.
“The BE Cluster serves as a convergence point between the Information and Operations Technology Clusters, which makes continued investment in this area of the business the correct strategy to drive sustained growth,” elaborates Zitzke.
The Information Technologies Cluster grew revenue by 13%, despite encountering resource challenges, which resulted in a reduction in profit; 4Sight continues to invest in talent management to upskill young talent.
The Operational Technologies (OT) Cluster was unable to grow top-line revenue but managed to improve profit by 39% and represents the strongest pipeline within the 4Sight group moving forward in 2022.
“Our indirect go-to-market strategy also contributed significantly to our revenue growth, with the Channel Partner (CP) Cluster improving revenue by 39%” states Van der Merwe.
4Sight Holdings plans to leverage the CP Cluster model to drive its international expansion, highlighting plans to expand into various countries in Africa.
“We have appointed partners in these strategic regions to grow our African footprint and increase dollar-based revenues. Our Namibian operation also launched in 2021,” elaborates Ackerman.
The company's focus in 2022 will shift to expansion into the Pacific region through a digital-only channel to mitigate costs and lower risks.
Zitzke adds that these strategic initiatives, coupled with 4Sight's recent success in achieving its ISO 27001 certification for Information Security Management Systems, bodes well for the business in the year ahead.
“We continue to invest 33% of profits into building innovative solutions and intellectual property to create assets that differentiate our offering and deliver a complete end-to-end solution for our customers and partners,” explains Zitzke.
“Our ISO certification was the icing on the cake for a successful 2021 demonstrating our commitment to the highest level of internal compliance and security; we will now turn our focus to driving organic growth from our established solutions, offering a proven go-to-market strategy.”
4Sight will continue working to achieve a 70:30 revenue split – 70% being annuity-based income. In this regard, the company is currently tracking well on 53% and remains focused on achieving its target.
“Our results display the strength of our diversified growth profile. Our defined strategy is clearly paying off and we will continue to work it to maintain our momentum,” concludes Zitzke.
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