EOH announces outstanding annual results

In brief:
* Group revenue increased by 50.0% to R3 642.9 million (2011: R2 420.0 million)
* Profit before tax increased by 45.0% to R339.9 million (2011: R234.4 million)
* Headline earnings per share (HEPS) up 29.1% to 253.1 cents (2011: 196.1 cents)
* Cash increased by 40.5% to R451.8 million (2011: R321.5 million)
* Dividend up by 32.6% to 70 cents (2011: 48 cents)

EOH, a leader in technology and business solutions, the largest implementer of enterprise applications in South Africa and a provider of end-to-end solutions, announced outstanding annual results for the period ended 31 July 2012. The company plans to continue growing both organically and acquisitively. The main growth areas include infrastructure and application managed services, cloud offerings, enterprise applications, information management, business process outsourcing, security and intelligent infrastructure.

"EOH is now the strongest player in the IT arena with 4 700 people, 3 500 customers, good brand, strong reputation for delivery capabilities and a very healthy financial standing. EOH has the widest offerings in our industry," says CEO Asher Bohbot.

The board of directors of EOH expressed its satisfaction with the performance for the period under review. Revenue increased by 50.0% to R3 642.9 million and profit before tax is up by 45.0% to R339.9 million. The growth is attributable to a combination of both organic growth and recent acquisitions. Earnings per share (EPS) and headline earnings per share (HEPS) have grown by 29.8% and 29.1%, respectively. Cash has increased by 41% to R451.9 million, placing EOH in a strong financial position with substantial cash resources to ensure sustainable future growth.

EOH has declared a 70 cents dividend.

All areas of EOH's business operations have seen strong growth during the period under review, with a further shift to services in line with EOH's strategic intent. Services revenue has increased to R2 344.6 million, a 61% increase over the previous corresponding period. Software sales have increased by 28% to R614.9 million. Infrastructure sales have increased by 39% to R683 million. Overall margin is at 9.8% compared to 9.6% in the previous period.

EOH's success is largely attributable to its unfailing business philosophy that is centred on people, says Bohbot. "We have always strived to attract, develop and retain the best people in the industry with the purpose of creating life-long, mutually beneficial partnerships with our customers and partners. Doing things right first time epitomises what we do at EOH," says Bohbot.

EOH is certified as a Large Enterprise Level 3 Contributor with BEE Procurement Recognition of 138% as a value-adding vendor. EOH's current black shareholding is 37.47%. Fifty-seven percent of EOH's staff and 60% of its board members are black. EOH's corporate social investment (CSI) initiatives are focused around education and wellness. One of its community involvement projects is the Maths Centre Programme, whose primary object is to equip teachers with skills to develop learner competency in Maths. It has also given its support to The Child and Youth Development Programme of Afrika Tikkun. This programme provides support to youth during their school careers and assists them in finding employment in the workplace. During this year, EOH has spent R3.7 million on CSI initiatives. Its enterprise development initiatives are aimed at developing black-owned ICT companies through financial and non-financial support, which includes the transfer of business skills. EOH has spent R21.1 million in the form of loans and training on enterprise development.

EOH has 620 trainees participating in a year-long graduate and school leavers' programme and has spent R8.4 million on this programme so far and is committed to spending a further R7.8 million over the next six months.

As a South African enterprise, EOH has the responsibility to actively contribute its knowledge and resources to improve public sector effectiveness, says Bohbot. "The public sector represents a major business opportunity and will form part of our future growth. I am also happy to say that our job creation initiative is gaining momentum. With the assumption that skills equal jobs, we have embarked on a learnership programme whereby 620 young people will be given the opportunity to participate in year-long learnership and trainee programmes.

"We are working with our international partners and large customers on plans to avoid sending jobs overseas and to rather bring global jobs to South Africa. We are also lobbying government to create regulations and incentives to keep jobs in South Africa and to bring more opportunities to our shores. To support this point of view, EOH has initiated an off-shoring business, in addition to creating an internal role for job creation," says Bohbot.

There are certainly opportunities to grow EOH's solutions and service offerings and to strengthen EOH's industry verticals, says Bohbot. "We have the resources, track record, know-how, ability and capability to continue to grow aggressively. Prospects in the rest of Africa are encouraging and EOH sees opportunities in this territory," concludes Bohbot.