EOH is nothing if not consistent. The JSE-listed technology services company has again turned in a strong set of financial results, with headline earnings per share rising by 22% on the back of revenue that climbed by 21% to R7.2 billion in the six months to January 31 2016.
The company attributed the performance to a combination of strong organic growth and recent acquisitions. Operating profit margins improved to 12.6% despite tough economic conditions. Profit before tax increased by 26% to R845 million.
EOH said all its divisions contributed to its growth. Services and software continue to be the dominant revenue drivers, accounting for 83% of revenue. Though it’s expanding its focus on markets elsewhere in Africa and the Middle East, sales in South Africa still accounted for 87% of total revenue in the period.
“EOH is increasingly becoming a multinational company and we will continue to expand in Africa and the Middle East,” the company said in a note to shareholders alongside the interim results. “We will continue to develop, distribute and implement EOH’s niche software and own intellectual property solutions across our existing footprint and into new territories.”
During the six-month period, EOH acquired nine businesses, mainly to bolster its technology applications, software and consulting solutions capabilities, augment its business process outsourcing service offerings and enhance its industrial technology capabilities.
It paid a total of R744 million for these deals, made up of R393 million in cash and 2.2 million EOH shares.
In most instances, 100% of the shares were acquired, it said. Had the effective dates of the acquisitions been from August 1 2016, the contribution to revenue and profit before tax would have been R508 million and R73 million respectively.
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