EOH says it's weathering the Covid-19 storm just fine - TechCentral

EOH says it’s weathering the Covid-19 storm just fine

Listed technology services group EOH Holdings said in an update to shareholders on Tuesday that it’s weathering the Covid-19 economic storm, with its financial performance remaining “resilient” in the quarter ended 30 April.

This, it said in a statement before markets opened, demonstrates the “relevance of EOH’s products and services”.

Though revenue experienced “some downward pressure as a result of the lockdown”, the group delivered positive earnings before interest, tax, depreciation and amortisation as a result of cost management and the elimination of unnecessary spend. It also saw positive cash generation from operations for the quarter.

“The national lockdown has necessitated the review and assessment of ways of working differently and to adopt a cost-conscious mindset and focus on liquidity,” the group said, adding that it expects to exceed its target of removing R400-million of cash costs from the business in the four month to the end of July.

It has achieved this by cutting salaries; securing rental holidays and extensions with landlords; reducing travel, entertainment and marketing spend; removing unnecessary costs; and ensuring cost structures are as flexible as possible, thereby reducing fixed costs.

“The group has continued to see good collections from its debtors’ book for the months of February, March, April and May, with all months recording collections in excess of R1-billion. As at 3 June 2020, the group had cash balances of R893-million, while also deleveraging in line with its strategy.”


EOH has agreed to a R1.6-billion debt deleveraging plan with its lenders. It has already achieved its first capital repayment milestone having repaid R540-million of the R1.6 billion – this is more than the R500-million agreed with lenders and ahead of the a 31 August deadline.

Since 1 August 2018, EOH has repaid nearly R1.8-billion to its lenders.

Since 1 February last year, the group has signed agreements for the disposal of non-core assets in excess of R1.4-billion (including extinguished liabilities), receiving a total of R865-million in cash.

The sale of Dental Information Systems for R250-million has been approved by the Competition Commission without conditions and is now before the Competition Tribunal. Discussions around the sale of other assets is ongoing.  — © 2020 NewsCentral Media

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