TECHNOLOGY, CONSULTING and outsourcing group EOH Holdings is trading on an undemanding eight times earnings multiple following its full-year results to July. The group, which recently celebrated its 10th anniversary, reported 22,9% growth in headline earnings per share to 96,8c on turnover growth of 35,1% to R950,9m. It had R119,1m in cash and cash equivalents at its year-end and could use some for more share buy backs at current levels. It also declared a dividend of 25c/share, up 25% on the previous year.
Most of EOH’s growth has been organic, supplemented by small, strategic acquisitions. The recent purchase by managed services subsidiary Mthombo IT Services of 300-seat call centre business called MultiPath is a good example.
CEO Asher Bohbot doesn’t believe in bulking up by acquisition but does want to add critical mass by going for big opportunities. He also wants to increase annuity income from 43% to 60%.
• • More co-ordinated cross-selling throughout business units to the group’s broader client base. To play in the global outsourcing game, using offices in Britain as a base to source clients. To expand its franchise model in Africa. EOH only provides consulting services to Government. It will concentrate on winning more State business in broader areas.
The general economic slowdown could arguably affect its clients, slowing EOH’s growth. But that hasn’t been the case to date. SA’s skills shortage remains a challenge for the sector. EOH looked at buying a company in education and training but chose to build its own to train productive, sophisticated skills for use inside the company or the industry.