Technology group EOH has continued to defy weak economic conditions, posting a robust set of results for the year ended 31 July 2016.
Headline earnings per share rose by a quarter to R7,19 on the back of a 31% improvement in revenue to R12,8bn. Operating profit was up by an impressive 37% to R1,4bn.
As a result of the good earnings performance, EOH has lifted its dividend by 23% to R1,85/share.
EOH has attributed the good growth to a combination of strong organic growth and recent acquisitions, with organic growth contributing 59% of revenue growth. The balance sheet improved, too, with cash and cash equivalents increasing to R1,9bn.
Revenue from services reached R9,8bn and accounted for 77% of EOH’s total revenue. Sales from South Africa made up 86% of revenue.
During the financial year, EOH concluded two significant acquisitions. The first was of the GCT group of companies, which focuses on utility management via smart metering solutions and analytical, forensic and investigative software solutions for the security sector. The second was Mehleketo, which focuses on rail technology.
“EOH acquired several smaller strategic businesses to enhance its industrial technologies capability, augment its business process outsourcing businesses and bolster its IT services and infrastructure businesses,” it said.
The group’s future growth strategy will be based on both organic and inorganic expansion, said CEO Asher Bohbot. “EOH plans to add new products and services, continue its aggressive expansion into Africa and the Middle East and will further grow the distribution of its own niche software products internationally,” he said.
EOH closed on the JSE on Tuesday, before publication of the annual results, at R152,19/share. The counter, which is trading a price:earnings multiple of 23,3x, has fallen by 4,3% year on year. Over three years, it has added 123,5% and over five years it has delivered an impressive return of 553,5%. — © 2016 NewsCentral Media
