EOH group CEO Stephen van Coller will step down from his role in March next year.
This emerged when the JSE-listed technology services group announced its financial results for the year ended 31 July.
In a statement, the company says Van Coller has agreed to extend his initial five-year contract for another six months but has asked the board not to consider an extension beyond 31 March 2024, at which time he will officially retire.
Van Coller says: “It has been quite a journey and not what I expected when I accepted the CEO role in 2018. Nevertheless, I am immensely proud of what we have achieved as a team. EOH today is a sustainable company, which lies at the heart of South Africa’s ICT ecosystem and plays an important role in everyone’s lives.
“It has great potential both locally and internationally, and now is an appropriate time to hand over to new leadership to guide the company through this next chapter.”
Van Coller will, however, remain available to the board after 31 March 2024, as required, to help with a smooth leadership transition and complete any projects that require his continued involvement, says EOH.
Mopping up the mess
Van Coller has largely been credited with cleaning up the corruption that engulfed EOH.
The JSE-listed IT services group has been on the mend under Van Coller since an ENSafrica investigation into EOH’s dealings revealed many instances of governance failings and wrongdoing.
EOH appointed ENSafrica to conduct a proactive, comprehensive investigation of the company’s contracts and identify any wrongdoing or criminal conduct in the acquisition, award or execution of contracts.
The probe found about R1.2 billion worth of suspicious transactions at EOH, which mostly involved transactions within the public sector contracts.
The company then went on to say it was looking to “ring-fence” its problematic contracts into a single entity before blacklisting 50 corruption-tainted entities within the group.
Van Coller has also played a crucial role in the reduction of EOH’s debt, while disposing of businesses deemed non-core.
Under his leadership, EOH opened criminal charges, looking for R6.4 billion in damages from the former executives fingered in the alleged corrupt activities.
In its latest financial results, EOH says despite a deteriorating local economy and significant headwinds in the public sector, the company’s continuing operations delivered revenue growth of 3%, an increase in operating profit of 35% and a halving of net loss after tax from R160 million in FY2022 to R81 million for the year ended 31 July.
At a divisional level, it says, the international business delivered excellent growth of 23% in revenue, largely driven by the group’s Middle East operations.
It explains this solid performance flowed through to an EBITDA level, with a 41% increase to R56 million.
The IT infrastructure business delivered growth of 15%, driven by new client acquisitions in the mid-market space as the business continued to tailor its offerings.
“Our digital enablement business showed good growth at 7%, as it continued to see customers accelerate their digital strategies,” says the company.
It adds the turnaround in the EasyHQ business was completed during the year and this division recorded a 33% increase in EBITDA to R121 million, despite experiencing a 5% reduction in revenue as unprofitable contracts were closed out over the 12-month period.
EasyHQ houses the group risk and compliance “as-a-service” intellectual property created over the past four years and is an exciting business for EOH’s platform growth, the firm notes.
According to EOH, the biggest remaining challenges are in the enterprise applications and software reseller units, and the Nextec Infrastructure and Consulting businesses.
It points out these divisions have new leadership and are core focus areas for 2024.
Van Coller says: “It has been another year of improvement and great change at EOH, with the successful capital raise and restructuring of our debt facilities, re-alignment of our operations into autonomous pillars and over R90 million invested into growth initiatives.
“Despite the deteriorating market conditions and lack of public sector spend and SOE [state-owned enterprise] technology investment, our businesses have delivered solid improvements in profitability, and are well-positioned to continue this trend as our growth strategy and operating model gain traction.”
Meanwhile, the company states that following group CFO Megan Pydigadu’s resignation, as announced on 25 July, the board has appointed Marialet Greeff as interim group chief financial officer.
Greeff has been with the group since 2019 and is currently group executive for treasury, tax and regulatory finance.
He is a CA (SA) and has played an integral role in both the finance function and the restructuring and turnaround process since joining EOH in 2019, EOH adds.
The successful rights offer has, in addition to largely rectifying EOH’s capital structure, given the EOH board the freedom to consider the next chapter for the group, it notes.
EOH board chairman Andrew Mthembu says: “We are hugely grateful to both Stephen and Megan for their leadership, which has resulted in a sustainable, growing business.
“As EOH has changed its strategic focus and significantly decentralised its head office functions over the past year, the board has the necessary time to undertake a thorough skills assessment as part of the recruitment of a new CEO and CFO.
“Importantly, to ensure business continuity, the board has signed four-year contracts with the heads of the respective operational businesses, namely Marius De Larey, Brian Harding and Fatima Newman.”