EOH interim results impress

Technology and outsourcing company EOH Holdings (EOH) on Wednesday reported a 29.8% rise in diluted headline earnings per share to 111.5 cents for the six months ended December 2011 from 85.9 cents a year ago.

Revenue was up 44.1% at R1.642 billion, while profit before tax jumped 54.9% to R169.2 million.

The company attributed the growth in revenue to a combination of both organic growth and recent acquisitions.

During the period under review, EOH’s primary focus was to increase its Managed Services, Microsoft and BPO businesses and, accordingly, the group made several acquisitions in these areas.

It acquired 100% of Stanley Security, a company specialising in security equipment, for a cash consideration of R83 million in November 2011 and acquired 100% of Airborne Consulting with effect from December 2011 for an amount of R33 million. Airborne Consulting specialises in software development, management consulting, infrastructure and managed services. The business was acquired to augment EOH’s existing Microsoft businesses.

It also acquired Benguela Health, Blue Platinum Consulting, Coros Consulting Services, Systems Consulting and Training Services and LMM Occupational Health Inc. The aggregated turnover of businesses acquired during the period amounted to R105.6 million contributing R11.2 million to profit before tax.

All areas of EOH’s business operations saw growth, with a shift to services in line with EOH’s strategic intent.

Services revenue increased 58% to R1.027 billion, with the margins increasing from 9.8% to 10.9%. Software sales increased 14.5% to R264.2 million, with an increase in margins from 13.4% to 13.7%. Infrastructure sales increased by 35.6% with the margins increasing from 5.6% to 6.0%.

Looking ahead, EOH said it would continue to grow both organically and acquisitively.
“There are opportunities to grow EOH’s solutions and service offerings and to strengthen EOH’s industry verticals. The main areas of growth will be in infrastructure and application managed services, cloud offerings, enterprise applications, information management, BPO, security and intelligent infrastructure management,” it said.