EOH Holdings rose more than 5% in Johannesburg on Wednesday morning after the IT services group reported its first financial results following its recent rights issue.
Revenue from continuing operations climbed by 8%, despite what EOH described as a “challenging local operating environment”, while gross profit margins remained “stable” at 29%. It reported a cash balance at end-January of R234-million. The financial results follow EOH’s recent recapitalisation, which saw R600-million in new capital raised from shareholders, including R100-million from Lebashe Investment Group, that brought the group’s interest-bearing debt down to more manageable levels. EOH has now repackaged the remaining debt under a single facility with Standard Bank.
EOH said its Digital Enablement division performed well in the latest interim reporting period, with a 20% increase in revenue and 24% improvement in earnings before interest, tax, depreciation and amortisation , which drove higher margins. International diversification also helped, with the Middle East, Europe and the UK showing “excellent growth”. Offshore business now accounts for a third of Digital Enablement revenues.