EOH’s share price on Monday reversed earlier gains after the IT services group issued an earnings update that appeared to disappoint investors.
It said headline earnings per share — a key figure watched by investors on the JSE — are expected to increase by between 10% and 20%, to be between R7.91 and R8.63 for the year ended 31 July 2017. EOH reported Heps of R7.19 in the 2016 financial year.
Shortly after 2pm on Monday, EOH’s share price was trading at R107.25, down 2.6% on yesterday’s close and well off its intraday high of R112/share.
EOH’s share price has fallen sharply this year as shareholders fretted about the group’s ability to continue to maintain the high earnings growth rates it has enjoyed for more than a decade.
Investors have also been skittish over allegations, refuted by management, that the group may have been involved in dodgy dealings to secure government contracts. Also, the exit this year of founding CEO Asher Bohbot has not helped sentiment.
The group expects earnings per share to rise, also by between 10% and 20%.
The earnings growth is less than the top-line growth number, with revenue for the year expected to rise by 21%.
EOH said it expects to release its results on the JSE’s stock exchange news service on 19 September. — (c) 2017 NewsCentral Media