EOH builds internal capacity to propel African expansion. Johannesburg - EOH is creating a new structure within the company to drive a deliberate and aggressive approach to further growth on the continent, according to chief executive Asher Bohbot. Outside of South Africa, the outsourcing, technology and consulting firm has offices in west and central Africa and in the UK. “We want to leverage that presence in a bigger way,” Bohbot said yesterday. “We will do it in measured steps.” The group services various industries that are well-represented on the continent, including financial services, mining and the public sector. He did not comment on whether or not the proactive approach involved new acquisitions, saying only: “We’ll decide what’s appropriate when it’s necessary.” He said the company would use internal resources and not borrow. In March, Bohbot said EOH expected to accrue 30 percent of its total revenue from activities on the rest of the continent over the next five years. “With all fairness we’ve got single figures in Africa while we are growing in South Africa,” he said as EOH posted a 40 percent jump in revenue to R5.08 billion for the year to July. Operating profit was up a third to R2bn compared with R1.5bn last year. Cash grew 45 percent to R653 million. EOH is one of the largest information and communication technology service providers in the country and claims to be the largest implementer of enterprise applications solutions. It offers outsourcing, cloud computing services, managed services and business process outsourcing to sectors including telecommunications, mining and retail. The firm employs 6 000 people. Services revenue jumped 55 percent to R3.6bn while software revenue increased 12 percent to R687m and infrastructure sales 13 percent to R772m. Bohbot said during the year under review customers reflected the changes in the global technology environment. Customers needed to quickly adapt their technology needs. He said customers were now demanding to see a direct impact on costs and were no longer ignorantly ordering hardware or software. Leith Wimble, an equity analyst at Nedbank Private Wealth, said: “With significant cash reserves at its disposal, EOH is well placed to pursue its domestic and African growth strategy by concluding further acquisitions. In our view, EOH’s tight integration within over 2 500 corporate customers in South Africa via its services division serves as a formidable competitive advantage.” He added that the firm had displayed an enviable track record over the past decade. “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.” Earnings a share rose 35 percent to R3.44. Headline earnings a share increased 34 percent to R3.39. A dividend of 95c a share was declared. EOH shares rose 0.65 percent to close at R67 yesterday. - Business Report
Posted on: Thu, 12 Sep 2013 06:33:40 +0000
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