- EOH says its turnaround plan remains on track and is underpinned by stable revenue and earnings.
- The company says it it expects to report an operating profit for the full-year.
- EOH is in the process of suing its former executives for R6.4 billion to recoup money lost to corruption.
After a tough period of tender corruption scandals, technology group EOH says its turnaround strategy is on track – despite challenges in the domestic and global economic environment.
The company says it has kept a tight leash on cash and working capital, and expects to report an operating profit for the full year.
Cash generation from business as usual – before finance costs and once-off legacy costs – continued to be positive, with a significant reduction in once-off legacy costs in the second half of 2021 compared to the previous six months.
A net cash balance of R605 million is banked.
"Our turnaround plan remains on track and is underpinned by stable revenue and quality earnings," said chief executive Stephen van Coller in a pre-close update for the year to end July.
EOH, which provides technology solutions to the public and private sectors, launched a R6.4 billion civil claim against its former executives implicated in a wide-ranging tender corruption scandal.
Those being sued include the company’s co-founder and erstwhile CEO, Asher Bohbot. In February 2019, the new EOH board appointed ENSafrica to investigate the business dealings of the firm, covering the period from 2015 to September 2018.
The probe flagged suspicious business dealings worth R1.2 billion and found evidence of numerous governance failings, including unsubstantiated payments, as well as tender irregularities mainly linked to subsidiary EOH Mthombo.
Van Coller, who took over as CEO in September 2018, said the company was positioned to grow its international footprint in the UK, Europe and the Middle East.
Conditions locally were seen as "extremely challenging" including the impact of the third wave of Covid-19, ongoing electricity supply challenges and the effects of the recent civil unrest.
In April, the company posted an operating profit of R59 billion, a recovery from a loss of nearly R1 billion in the previous year. EOH has disposed of some of its non-core businesses, including Sybrin, the provider of payment and information management software and services it acquired in October 2013.
The company was sold in June for R334 million, and the sale is subject to competition approvals.