VALUE GO­ING UN­NO­TICED

Finweek English Edition - - Companies & Markets -

EOH HOLD­INGS, a busi­ness and tech­nol­ogy so­lu­tions provider, has a pres­ence in all ma­jor cen­tres in South Africa and Botswana, in ad­di­tion to op­er­at­ing in the rest of Africa and in Bri­tain. EOH’s pri­mary fo­cus is form­ing part­ner­ships with cor­po­rate com­pa­nies, through which it pro­vides IT strate­gies, so­lu­tions and main­te­nance ser­vices – with the re­sult its main­te­nance and out­sourc­ing ser­vices com­prise 75% of group rev­enue, 43% be­ing deemed an­nu­ity in na­ture.

In the year to July 2008 rev­enue in­creased 35% to R905m, while op­er­at­ing profit in­creased only 24% to R89m, trans­lat­ing to a lower but still strong op­er­at­ing mar­gin of 9,3%. That was pri­mar­ily due to marginally higher cost of sales and op­er­at­ing ex­penses. Fi­nance costs were 33% higher at R1,8m, pri­mar­ily as a re­sult of a R5,9m in­crease in over­draft fa­cil­i­ties. How­ever, that was more than off­set by the R2,4m in­crease in net fi­nance in­come to R5,1m – R4,8m of which re­lated to in­come earned on cash. Fur­ther­more, EOH’s gear­ing is min­i­mal, with to­tal in­ter­est­bear­ing debt to eq­uity just 8%.

Cash gen­er­ated from op­er­a­tions dropped 11%, due to a R25,6m in­vest­ment in work­ing cap­i­tal, R15m of that be­ing an in­crease in ac­counts re­ceiv­able. Nev­er­the­less, cash flow re­mained strong, with cash on hand at the end of the pe­riod at R119m. Earn­ings per share were 96,2c for the pe­riod, with div­i­dends per share in­creas­ing to a healthy 25c, up from 20c in 2007.

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