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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.