EOH reveals turnaround progress

·13 Apr 2022

Technology service provider EOH has published its interim results for the period ended January 2022 showing a big turnaround in earnings – headline earnings per share of 41 cents per share, was up 214% from a total headline loss per share in 2021.

The group generated an operating profit of R167 million from continuing and discontinued operations for the six month reporting period compared to R76 million generated a year earlier.

Stephen van Coller, EOH CEO, said: “We embarked on a challenging turnaround strategy for the EOH Group and it has been a tough but truly rewarding journey. Today we stand together as an agile and focused organisation proudly celebrating the fact that we are able to report positive earnings per share. This important milestone is clear evidence of our collective success.

“EOH’s full stack of technology offerings, its 5000-strong diversified client base as well as its global footprint, ensure that the group is well-positioned for the future.

“Our clients’ strong demand for full digital transformation and EOH’s ability to deliver on all their needs across infrastructure, software, and services puts the group in an attractive position with the ability to increase its market share.”

Highlights

Total revenue – R3.5 billion – down 20% to R4.4 billion
Gross profit margin improvement to 29.9% for HY2022 from 27.6% for HY2021
The operating profit margin increased to 4.8% for HY2022 from 1.7% for HY2021
Cash generated from operations was positive for the period. EOH had a cash balance of R625 million at the end of January and had undrawn overdraft facilities of R250 million available at 12 April 2022.

EOH said it made good progress in the deleveraging strategy with the conclusion of the sale of Sybrin and the proceeds received on 31 March 2022. It has also repaid R360 million of debt since the end of January 2022 with the majority of the proceeds coming from the Sybrin sale.

The sale of Information Services is expected to conclude in May 2022 and the group has also recently announced the sale of Network Solutions. “R500 million is expected to flow from these transactions which will further help in deleveraging the group,” EOH said.