To view the PDF file, sign up for a MySharenet subscription.

EOH HOLDINGS LIMITED - CEO Insights After First 100 Days

Release Date: 11/12/2018 14:02
Code(s): EOH     PDF:  
Wrap Text
CEO Insights After First 100 Days

EOH HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/014669/06)
Share code: EOH ISIN: ZAE000071072
(“EOH” or “the Group”)


CEO INSIGHTS AFTER FIRST 100 DAYS


Shareholders are advised that management are hosting an investor call at 14:30 today to provide a strategic update
from the Group CEO, as part of his first 100 day review, as well as an update on general trading conditions.

The webcast and call will include a presentation by management which is available on the Group’s website
at www.eoh.co.za and
https://78449.themediaframe.com/dataconf/productusers/eoh/mediaframe/27712/indexl.html.

Chief Executive, Stephen Van Coller, commented: “Following a strategic review during my first 100 days in
office and assessment of our business, we have refined and expanded the reporting and management of
business into four distinct operating units. This will allow us to better support these businesses as they need
different focus, capital structure and management. Firstly, EOH ICT is a largely cloud-based digital, data and
applications business. The second strategic pillar is NEXTEC that offers tremendous domain consulting,
advisory and knowledge process outsourcing options and various other solutions, while the third is our Own
Software businesses where the assessment has uncovered many significant opportunities to unlock value.
Lastly, the International business, which still requires focused attention and is at an early stage of being
implemented with an enhanced ability to ensure a better global delivery model”.

The new structure also presents opportunities for better cross-silo-selling and significantly enhanced and
improved collaboration, business unit empowerment and accountability to enable a fully customer-centric
approach that focuses on holistic solutions over products.

A detailed optimisation of the EOH property portfolio is being implemented as well as the centralisation of
treasury management and procurement on large items. This should deliver significant annual cost savings.

EOH remains a sound business, however specific legacy issues have affected the company’s value and
capital structure. These include the assets from the Group’s international businesses that in some cases are
in a growth phase and not paying dividends and in some other cases cash remains trapped in the countries.
Furthermore, there have been significant delayed payments from public sector transformational projects.
Resolution is expected on these issues over the coming eighteen month period.

Professional services and advisory firms are busy with a full assessment in terms of the Group’s compliance
and governance, also providing guidance on tools to optimise the corporate structure and cash
management, as well as assisting with the strategic implementation of the key business components, and
capital structure, of the Group.

As previously announced to shareholders, the Group has strengthened senior management for the Chief
Financial Officer and Treasury and Investor Relations functions.

Difficult trading conditions have continued in the first three months of the financial year, which have been
exacerbated by the constrained South African economy as well as the Government’s public sector austerity
measures. Despite these challenges, the Group has enhanced its focus and remained a key partner to its
diversified client base. Excluding its long outstanding public sector debt, Group working capital management
has improved. Organic revenue growth has been tough, remaining in the low single digits and margins
remain similar to 2018.

Mr Van Coller concluded: “Important progress has been made at EOH over the last few months, however,
there is a lot to do. Our strategic intent and alignment is now better focused which will ultimately enable us to
maintain and improve margins, while allowing our businesses to flourish separately and start moving to an
increased software and solution mix to create a more diverse business. We are bolstering our financial and
other reporting processes and we have also provided a business enabling governance framework and will
build a central treasury management function”.

In terms of Group growth funding, strategies for next year are being underscored by several core principles
and will include a focus on cash conversion, saving to invest and creating the right partnerships for scale. It
is an imperative that EOH’s value proposition aligns with current market trends which demand a shift from
complex, labour intensive, slow moving piecemeal applications and products to more simplified, agile,
efficient solutions that intelligently answer customers’ needs.

Shareholders are advised that that the financial information in this announcement and the investor
presentation has not been audited, reviewed or reported on by the Group’s auditors and that the content
thereof does not constitute a forecast.



Johannesburg
11 December 2018

Sponsor
Merchantec Capital

Date: 11/12/2018 02:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story