| Mon 14 Sep 2009, 10:10 | | EOH - EOH Holdings Limited - Reviewed Condensed Consolidated Results For The |
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EOH
EOH
EOH - EOH Holdings Limited - Reviewed Condensed Consolidated Results For The
Year Ended 31 July 2009
EOH Holdings Limited
Incorporated in the Republic of South Africa
(Company registration no: 1998/014669/06)
Share code: EOH & ISIN: ZAE000071072
("EOH" or "the group")
Reviewed Condensed Consolidated Results for the year ended 31 July 2009
- Revenue up 32,0% to R1 255,1 million
- PBT up 27,3% to R116,5 million
- EPS up 25,5% to 120,7 cents
- HEPS up 25,9% to 121,9 cents
- Cash up 73,6% to R206,9 million
- Dividend up 20,0% to 30,0 cents
Condensed Consolidated Income Statement
Reviewed Audited
R`000 2009 % change 2008
Revenue 1 255 067 32,0 950 934
Cost of sales (797 421) (625 737)
Gross profit 457 646 325 197
Operating profit 109 455 88 808
Investment revenue 10 602 5 141
Finance costs (2 788) (1 776)
Income from equity accounted - 120
investments
Net impairment of assets (424) (40)
Impairment of investment (352) -
Loss on disposal of associated - (777)
companies
Profit before taxation 116 493 27,3 91 476
Taxation (39 961) (29 990)
Profit after taxation 76 532 24,5 61 486
Attributable to:
Ordinary shareholders 77 835 60 988
Minority interests (1 303) 498
76 532 24,5 61 486
Total shares in issue 75 817 73 659
Weighted average number of shares 64 477 63 382
in issue
Diluted number of shares 74 221 71 160
Earnings per share (cents) 120,7 25,5 96,2
Diluted earnings per share 104,9 22,4 85,7
(cents)
Headline earnings reconciliation
Profit after taxation 77 835 60 988
attributable to ordinary
shareholders
Profit on disposal of assets (32) (457)
Net impairment of assets 424 40
Impairment of investment 352 -
Loss on disposal of associated - 777
companies
Headline earnings 78 579 61 348
Headline earnings per share 121,9 25,9 96,8
(cents)
Diluted headline earnings per 105,9 22,9 86,2
share (cents)
Condensed Consolidated Balance Sheet
Reviewed Audited
R`000 2009 2008
ASSETS
Non-current assets
Property, plant and equipment 37 170 29 764
Intangible assets 215 936 109 527
Investment in associate companies - 353
Loans receivable 4 833 5 712
Deferred taxation assets 26 692 11 809
Current assets
Inventory 7 872 7 821
Trade and other receivables 344 705 223 721
Trade receivables 334 474 217 849
Other receivables 10 231 5 872
Cash and cash equivalents 206 877 119 140
Total assets 844 085 507 847
EQUITIES AND LIABILITIES
Ordinary shareholders` interest 308 331 242 007
Minority interests (527) 776
Total equity 307 804 242 783
Non-current liabilities
Finance lease obligations 71 1 115
Vendors for acquisition 33 333 2 600
Deferred taxation liabilities 4 703 4 667
Current liabilities
Trade and other liabilities 415 790 208 955
Deferred revenue 41 066 32 658
Taxation payable 41 318 15 069
Total equity and liabilities 844 085 507 847
Net asset value per share 406,7 328,5
Condensed Consolidated Cash Flow Statement
Reviewed Audited
R`000 2009 2008
Net income before tax and separately 116 493 91 476
disclosed items
Non-cash items 16 664 10 492
Working capital changes 1 537 (23 558)
Cash generated by operating activities 134 694 78 410
Investment income 10 602 5 141
Finance costs (2 788) (1 776)
Taxation paid (25 927) (25 218)
Dividends paid (15 253) (12 655)
Net cash inflow from operating activities 101 328 43 902
Net cash inflow/(outflow) from investing 19 312 (21 567)
activities
Net cash (outflow) from financing (32 903) (17 331)
activities
Net movement in cash and cash equivalents 87 737 5 004
Cash and cash equivalents at beginning of 119 140 114 136
period
Cash and cash equivalents at end of period 206 877 119 140
Condensed Consolidated Statement of Changes in Equity
Share Share
R`000 capital premium Reserves
Audited balance at 1 August 2007 633 45 842 12 354
Movement in treasury shares (16) (694) (11 906)
Currency translation - - 976
IFRS 2 adjustment - - 5 992
Profit for the period - - -
Prior period adjustment - - -
Dividends - - -
Issue of share capital 11 1 275 -
Audited balance at 31 July 2008 628 46 423 7 416
Movement in treasury shares (22) (2 165) (11 154)
Movement in EOH Mthombo Share - - (3 395)
Trust
Post acquisition adjustment - - (1 665)
Reclassification adjustment - 5 156 -
Currency translation - - (127)
IFRS 2 adjustment - - 11 790
Profit for the period - - -
Dividends - - -
Issue of share capital 22 10 458 -
Reviewed balance at 31 July 2009 628 59 872 2 865
Retained Minority Total
R`000 earnings interests equity
Audited balance at 1 August 2007 140 009 278 199 116
Movement in treasury shares - - (12 616)
Currency translation - - 976
IFRS 2 adjustment - - 5 992
Profit for the period 60 988 498 61 486
Prior period adjustment (798) - (798)
Dividends (12 659) - (12 659)
Issue of share capital - - 1 286
Audited balance at 31 July 2008 187 540 776 242 783
Movement in treasury shares - - (13 341)
Movement in EOH Mthombo Share - - (3 395)
Trust
Post acquisition adjustment - - (1 665)
Reclassification adjustment (5 156) - -
Currency translation - - (127)
IFRS 2 adjustment - - 11 790
Profit for the period 77 835 (1 303) 76 532
Dividends (15 253) - (15 253)
Issue of share capital - - 10 480
Reviewed balance at 31 July 2009 244 966 (527) 307 804
Commentary
About EOH
The EOH vision is to be the best technology and business solutions company to
work for, partner with and invest in.
We are a business and technology solution provider. We endeavour to form life-
long partnerships by developing business and IT strategies, supplying and
implementing solutions and managing enterprise-wide systems and processes for
medium to large clients.
EOH was founded and listed on the JSE in 1998 and since then has grown from
strength to strength with the Head Office located in Johannesburg and operations
located in all the major centres of South Africa, West and Central Africa and
the UK.
EOH offers consultancy, technology and outsourcing solutions to a wide range of
industries. The goal is to match the needs of our 2 500 customers, enabling
them to get on with what they do best. We have an expansive solution set which
allows us to deliver a wide offering to our client base via our team of 1 600
staff. EOH serves the following industries: Financial Services, Mining Sector,
Manufacturing Industry, Public Sector and Telecommunications Industry.
Key objectives
EOH business philosophy is driven by four key objectives, namely:
Partner for Life - To develop lifelong mutually beneficial partnerships with
both our customers and technology partners.
Best people - To attract, develop and retain the best people.
Right first time - Excellent, professional planning and execution in all that we
do.
Profitable growth - Grow the business while ensuring corresponding growth in the
bottom line.
Operating model
EOH operates as a fully integrated business in the following three broad areas
of business.
Consulting
EOH Consulting Services assist in defining IT strategies, operations and
governance. We see IT as a driver for business change to ensure that our clients
maximise business value from their IT investment. We strive to align IT with
business needs and to ensure more business effectiveness and agility. Our
Consulting business offers:
- IT Strategy and Architecture;
- Business Operations Optimisation;
- Change Management; and
- Project Management.
Technology
Our technology offerings are based on best in class software processes and
methodologies and include the following:
- Enterprise Applications;
- Enterprise Performance Management;
- Enterprise Security Management;
- Service Management;
- Project and Portfolio Management;
- Software Testing and Quality Management;
- Business Technology Optimisation;
- Network Solutions and Optimisation; and
- Mining and Manufacturing Solutions.
Outsourcing
EOH has a broad range of outsourcing services that we offer to our clients which
includes:
- Infrastructure Managed Services;
- Technical and Application Managed Services;
- Desktop Managed Services; and
- Business Process Managed Services and Resourcing.
Basis of preparation
The condensed consolidated financial results have been prepared in accordance
with International Financial Reporting Standards, IAS 34 (Interim Financial
Reporting), the Listings Requirements of the JSE Limited and the South African
Companies Act 1973 (Act 61 of 1973), as amended. The accounting policies have
been applied uniformally throughout the group and have been consistently applied
with those in the prior year, which are supported by reasonable and prudent
judgements and estimates.
Review opinion
The condensed consolidated financial results for the year ended 31 July 2009
have been reviewed by the group`s auditors, IAPA Johannesburg, Chartered
Accountants (SA) and their review opinion is available for inspection at the
registered office of EOH.
Segmental reporting
EOH`s revenue is derived primarily from the provision of services (consulting,
systems implementation and integration and managed services), software licence
and maintenance revenue and the sale of infrastructure products. Annuity
business accounts for 44% of revenue.
R`000 Services Software Infrastructure Total
Revenue 645 052 380 932 229 083 1 255 067
Net profit before 56 987 52 685 6 821 116 493
tax
Financial results
The board of directors is satisfied with the performance for the period under
review. The growth for the period is partly organic complemented by recent
acquisitions. The balance sheet is strong with no debt and substantial cash
resources to support future growth and sustainability. The EOH board thanks
EOH`s people, customers and technology partners for their contribution in 2009.
Business combinations and year in review
In 2009 EOH crossed the billion rand turnover milestone with ease. This year
marked EOH becoming one of the top five IT service providers in Southern Africa
and the largest enterprise applications provider in our territory. Early in the
year we entered the resourcing, contract management and business process
outsourcing space through the acquisition of Highveld PFS.
At the beginning of the second half of the year, EOH was appointed as the long-
term sole representative of CA (the fourth largest software company in the
world) in Southern Africa, something EOH is very proud of. This partnership puts
EOH squarely as a first tier software and IT service provider in our region.
In 2009 we began promoting and selling our various offerings as a combined
composite solution to our blue chip customers, a process we believe will support
our endeavours to be the chosen lifelong technology partner to our key
customers.
Internally we have created a powerful leadership team strong enough to manage
the doubling of EOH. We also enhanced our shared services effectiveness allowing
our operating units to focus on their people and customers.
In 2009 EOH demonstrated its ability to attract technology partners, blue chip
customers and the best people in the industry.
Events after balance sheet date
There have been no material transactions since the end of the year that warrant
adjustment to, or notification in, the condensed consolidated financial results.
Future plans
The local economic environment is showing signs of improvement with customers
undertaking IT initiatives beyond the maintenance and support of their existing
IT investment.
Being recognised as a major player in the technology, consulting and outsourcing
space has enhanced our ability to deliver effective `end to end` solutions,
enabling EOH to offer its large clients a single source for a significant
portion of their IT needs.
The EOH brand is now well established, we have a solid customer base of over 2
500 clients, a wide spread of offerings, a strong annuity base and a healthy
balance sheet - EOH is in a strong position to grow even further. We aim to gain
our future growth by expanding our existing product sets and service offerings
as well as via strategic acquisitions. We believe we have the ability, the
management, the track record and the resources to do this effectively.
Transformation
EOH has 34,3% broad-based effective black ownership. Of the group`s over 1 600
employees, 43,5% are black as is 60% of EOH`s board of directors. EOH has an AA
Black Economic Empowerment rating (Level 3 contributor) and has progressed its
Enterprise Development initiative. EOH is committed to inclusive transformation
involving all its people and stakeholders.
Dividends
Notice is hereby given that a cash dividend of 30 cents (2008: 25 cents) per
share (the dividends) has been declared and is payable to shareholders recorded
in the books at the close of business on Friday, 30 October 2009. Shareholders
are advised that the last day of trade cum the dividend will be Friday, 23
October 2009. The shares will trade ex the dividend as from Monday, 26 October
2009. Payment will be made on Monday, 2 November 2009. Share certificates may
not be dematerialised or rematerialised during the period Monday, 26 October
2009 to Friday, 30 October 2009, both days inclusive.
Asher Bohbot
Chief Executive Officer
14 September 2009
Registered office
Block D, Gillooly`s View, 1 Osborne Lane, Bedfordview, 2008
Tel: (011) 607 8100
Fax: (011) 616 9929
Website: www.eoh.co.za
E-mail: info@eoh.co.za
Executive directors
Asher Bohbot (Chief Executive Officer)
Lucky Khumalo (Deputy Chief Executive Officer)
Pumeza Bam, John King, Dion Ramoo, Jane Thomson
Non-executive directors
Dr Mathews Phosa (Chairman), Prof. Tshilidzi Marwala
Tebogo Skwambane, Rob Sporen (Dutch)
Company secretary
Adri Els
Sponsor
Merchantec (Proprietary) Limited
Auditors
IAPA Johannesburg Chartered Accountants Inc.
Systems make it possible...
...People make it happen
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