Technology firm 4Sight is aiming to increase its value more than fivefold as it sets its sights on a R1bn valuation that would put it in contention for a listing on the JSE’s main board.
4Sight, which has traditionally invested in technology, telecommunication and media sector companies, underwent a dramatic board shake-up in October 2019 that saw the resignation of four directors and the appointment of seven new ones.
The public fight and the suspension of the company from the JSE for late results led to reputational damage which the new executive team is fighting to repair. The stock tumbled to a low of 16c per share at the time for the AltX-listed company, and has since recovered somewhat to trade at 29c.
With the company having turned the corner over the past two years, CEO Tertius Zitzke and his team have a target of increasing investor interest in the company.
A big part of this plan has to do with increasing the number of shares available for trading on the stock market.
“It’s now three years since we took over as the new exec, so we’ve stabilised. Now we’re going to attack the market more investor-wise. The big thing is that we’ve got a stable company with no debt, with cash,” Zitzke told Business Day.
“We’re buying 20% of the shares back now through a share buyback. For the next three years we’re focused on growing the equity and driving innovation.”
4Sight is a little traded stock, seeing no movement or change at all in its share price on Friday.
The group is listed on the JSE’s AltX exchange. Management says getting to a R1bn market cap would help its case to list on the main board of the exchange, which would increase interest in the company from fund managers and the investing public. Now valued at R191.36m, the business needs to grow 5.2 times to reach its goal.
Zitzke, a veteran ICT executive, says the problem is that 80% of the group’s equity is held by owners of companies that were swallowed up over the years.
He says the company is working with a team of advisers on the buyback plan with the aim of tripling the number of shares available for public trade.
“We must get to 60% free float and 40% management.”
Willie Ackerman, chief sales and marketing officer at 4Sight, explains: “So 40% needs to be in management’s hands and 60% needs to be float so that we get liquidity, otherwise we’re not going to get the share price up.
“We’re envisioning for the next three years a big drive [to get to] the [JSE] main board.”
While Zitzke has so far been able to execute on the group’s turnaround, its ambitions for a high valuation are stifled by a market that has not been kind to technology stocks as the cost of capital increases and investors look for safe places to invest their money.
As markets continue to be volatile, management appears focused on growth, controlling what they can, with a push for innovation and expanding into new markets.
Earlier in 2022, 4Sight announced it was expanding its regional office in Windhoek to make its range of technology offerings available to the Namibian market. At the time, Zitzke said the company plans to make about half of its revenue from outside SA.
The group has formed partnerships with original equipment manufacturers (OEMs), among others in the industry, as part of its planned transformation.
It is approaching its Africa expansion in a number of ways. Through its network of partners, the company recently entered French-speaking countries such as Morocco and Tunisia.
The group announced early in 2021 that it will partner with Singapore developer Cognius.ai in a project to take conversational AI technology to businesses across Africa.
Conversational AI refers to technologies that users can talk to and communicate with such as chatbots and voice assistants.
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