EOH backs ANC leaders

Johannesburg, 20 Mar 2008

JSE-listed EOH will not participate in the panic in SA's business and investor community.

Instead, company CE Asher Bohbot says the current environment offers many opportunities for those organisations that are willing to think clearly and with foresight.

"In SA we tend to panic but we really don't need to. Many regions in the US and Western Europe have experienced situations similar to ours. And they survived. Solutions will be found to these challenges; we must be focused on finding the opportunities," he explains.

New leadership

Referring to EOH chairman and ANC treasurer Mathews Phosa, Bohbot says the company has every reason to believe the ANC's new leadership is business-friendly.

"The new regime has a stronger focus on service delivery than ever before. We believe this will result in the public sector being more active in adopting technologies and infrastructure that support improved service delivery. This regime is business-friendly, action-driven and service-focused," he comments.

However, Bohbot admits the company is facing some challenges to its transformation initiatives.

"We have done some stuff [EOH has 33.4% effective black ownership], but it is not enough. The black economic empowerment (BEE) criteria will always be there and as companies improve on their ratings, there is pressure for us to improve on ours," he reveals.

"If you are cynical, you could say that we are being disqualified from some contracts because we are not black enough. The truth is we need more black people inside our company to sit in front of black buyers. This is crucial to our success and we are struggling with it."

Lucky Khumalo, Mthombo IT Services COO and EOH director, agrees that attracting black talent remains a challenge.

"These people are either employed or pursuing their own ventures. We've done well in restructuring [EOH's] board, but down the chain it gets far more difficult. Of course, we also have to consider that black talent comes at premium of well over 30%," he comments.

Going strong

Despite the difficulties of finding and retaining black staff, EOH delivered a strong performance for the six months ended 31 January.

Revenue for that period ended 45% up, at R436 million, while profit after tax increased 25%, to R27 million. Both earnings per share (EPS) and headline EPS rose 21%, to 42.4c and 42.2c, respectively.

The company has outlined 11 focus areas that will help it to maintain positive growth numbers in the coming years. This includes growing its outsourcing practice; developing end-to-end service offerings, including skills; stepping up its resourcing business; expanding globally; and finding strategic acquisitions which add bulk to the group, or allow it to enter new arenas.