Technology group EOH, whose share price has come under significant selling pressure in the past month as investors worry about its ability to maintain its stellar growth record, rose by almost 2% in trading on Tuesday morning after telling shareholders it is on track to report significant growth in the six months to end-January 2016.
In an unusual move, which at least one trader has described as an attempt to boost its flagging share price, EOH on Tuesday issued a voluntary statement to shareholders in which it boasted of recent acquisitions and said its strong growth trajectory was on track.
“EOH’s growth for the six-month period to 31 January 2016 is expected to again be positive, with significant year-on-year growth in revenue, profit and headline earnings per share,” the group said in a statement issued via the JSE’s stock exchange news service. It said a detailed trading update would be published before the end of next month, ahead of publication of its interim results on 9 March.
In the update, EOH said, too, that is has concluded a number of acquisitions, which will allow it to grow in new markets.
“Further to the company’s published plans to expand into new territories, EOH has concluded the acquisition of 50% or more of the following businesses, all in the EOH ICT division: Consol Systems (Morocco) BC Skills (Morocco), Acron (Turkey), Cozumevi (Turkey), Acron (Iran) and EBS (Mozambique).”
It said the acquisitions will “serve as a base for EOH to grow aggressively in these territories, both organically and through further acquisitions, by providing EOH’s vast range of service offerings, which are all relevant to these economies”.
“In addition, we have set up offices in the United Arab Emirates, aimed at serving the region. EOH now has over a thousand employees based outside of South Africa, making it a truly significant player in these territories.”
At 10.30am, EOH was trading up by 1,6% at R125,67/share, after touching an earlier intra-day high of R126,31/share. In the past month, EOH’s share price has declined by 20%. However, over the longer term it remains a strong performer, adding 622% over five years. — (c) 2015 NewsCentral Media
