Big EOH turnaround
South African technology services company EOH has released its financial results for the year ended 31 July 2021, revealing the organisation has swung operating profit to R147 million from a R1.3 billion loss last year.
The company said its work to close out legacy contracts and make targeted disposals over the last two years had resulted in more profit from a smaller revenue base of R7.9 billion.
Other notable improvements included gross profit margin climbing from 22% to 28% year-on-year, operating margins increasing to 2% from a -12% last year, and adjusted EBITA margin jumping to 9% from 0%.
EOH CEO Stephen van Coller said he was proud that the company had been “rebuilt” in such a short time frame.
“Just two and a half years ago, the new EOH management team initiated a massive turnaround strategy for the Group,” Van Coller said.
“For the first time since I arrived, our current assets exceed our current liabilities, and we are well-positioned to progress the transformed EOH in supporting our customers to solve their business challenges using our innovative technology offerings.”
Van Coller said EOH was now streamlined, profitable and winning new public and private sector contracts across multiple geographies.
Stephen van Coller, EOH CEO
EOH said it was keenly focused on enhancing its end-to-end technology solutions with future generation offerings that will position EOH as the leading technology solutions partner.
Van Coller said the company remained cautiously optimistic around the economy’s recovery over the next few months and how emerging economic trends may impact its business.
2021 has not been an easy year for EOH, with the company struggling to get away from a history of corrupt dealings.
The company’s shares plummeted in August on the back of a public sector blacklisting threat and SIU investigation for corrupt contracts from years ago.
Since then, shares have recovered significantly from R4.60 to R8.09, indicating renewed trust in Van Coller’s ability to put the corruption to bed and bring the business back from the brink.
Van Coller has been forthcoming about EOH’s dodgy past dealings and cooperated with the SIU, Hawks, and State Capture Inquiry in this regard.
That has made the company a soft target for government and law enforcement agencies to show that action is being taken against corruption.
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