EOH plans to continue growth in rest of Africa

TECHNOLOGY group EOH said yesterday it had made “significant strides” into the rest of Africa and plans to increase its presence across the continent.

EOH, which yesterday declared full-year dividend of 95c per share, is looking for further expansion opportunities in Kenya, Tanzania, Nigeria and Ghana.

EOH already has a presence in some countries in West Africa and East Africa regions but was looking at establishing fully fledged operations. The group sees potential growth from those regions which could diversify its earnings and boost revenue. “EOH now has the structures and processes in place to be far more strategic and proactive in its approach to doing business in Africa,” CEO Asher Bohbot said.

He said the company was pursuing partnerships in some of those countries. “We are organising ourselves to work more intensively in Africa. We want to capitalise on different activities we have in some of those countries,” he said.

EOH reported a 49% rise in profit after tax to R331m for the year to July. Diluted headline earnings per share grew 36% to 305.6c. Revenue increased by 40% to R5.1bn.

Mr Bohbot attributed the growth to a combination of both organic growth and acquisitions.

“EOH is arguably the highestquality IT investment opportunity listed on the JSE with an enviable performance track record over the last decade. Full-year results to July 31 2013 were stellar,” Nedbank Private Wealth said.

All areas of EOH’s business operations had strong growth in the period under review. Services revenue increased to R3.6bn — a 55% increase over the previous corresponding period. Software sales increased 12% to R687m. Infrastructure sales increased 13% to R772m.

“In our view, EOH’s tight inte- gration within over 2,500 corporate customers in SA via its services division serves as a formidable competitive advantage.

“Valuation, as always, remains a key consideration for investors. While historic multiples may look demanding, we believe EOH should be viewed as a premium-rated counter and it is therefore still likely to deliver acceptable returns to shareholders from current levels on a three-year view,” the firm said.

Mr Bohbot said EOH would continue to grow aggressively. “We have the people, the financial resources, the agility, the track record, and know-how to continue to grow aggressively in all areas of our business and to expand into new services and territories. Prospects in the rest of Africa are encouraging and we see … growth in identified countries.”

Nedbank Private Wealth said with significant cash reserves at its disposal, EOH was well placed to pursue its growth strategy with acquisitions.

Mr Bohbot said EOH was always on the lookout for acquisitions that could complement the business.