Earnings per share jump 22% for EOH Holdings
EOH Holdings aims to expand its footprint in Africa and the Middle East, as it grows its technological might.
The group yesterday reported revenue that increased by 21 percent to R7.24 billion, while headline earnings per share jumped 22 percent to 438 cents a share for the six months to end January.
“EOH is increasingly becoming a multi-national company and we will continue to expand in Africa and the Middle East. We will continue to develop, distribute and implement EOH’s niche software and own IP solutions across our existing footprint and into new territories,” the group said.
The group is the largest technology services company in Africa. EOH delivers technology services to more than 5 000 large enterprise customers across all major industries throughout South Africa, Africa and the Middle East.
Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said the company was continuing to execute its strategy very well and the reported organic growth rate remained ahead of the South African IT market, which implied EOH was continuing to gain market share.
“However, the growth rate is starting to slow somewhat as the group gets bigger, but there are no major operational concerns at the moment. The rest of Africa and the Middle East expansion are still at an early stage and we believe EOH needs to proceed with caution there, as those markets are quite different from the South African IT market,” said Takaendesa.
The company has benefited from its acquisitions in the past. In the five-year period between 2011 and 2016, the revenue streams show that EOH earned 63 percent of its revenues from the cumulative acquisitions it had made.
One of the important acquisitions was Construction Computer Software (CSS) it acquired in 2015 for an undisclosed amount. CSS has a presence in 50 countries including South Africa, the Middle East, Europe, Australia and South America.
The group wants to continue developing new services and bring suitable businesses to the group. “We will continue to develop new services, products and solutions; meet our clients’ ever-increasing technology needs; and partner with new vendors both locally and abroad. “We will continue to find suitable businesses to join the group to complement and supplement our existing solution clusters,” the group said.
Takaendesa said the company delivered results that met the market’s expectations. “The interim results were largely in line with company guidance provided in February and therefore in line with adjusted market expectations since that time. The trading update in February guided headline earnings per share growth range of 20 percent to 25 percent and they have delivered 22 percent.”