JOHANNESBURG - Technology group EOH said on Thursday trading conditions remained under pressure due to the weak macro environment in addition to the negative impact from governance failings at the company.
On July 16 EOH said a probe by ENSafrica had found evidence of serious governance failings and wrongdoing, including unsubstantiated payments, tender irregularities and other unethical business dealings.
In an update on Thursday, EOH said there had been some improvement following the release of an interim update from ENS as clients resumed business with the group, but added that the benefits would not be realised until after year end.
"This has resulted in revenue remaining under pressure which has increased further in the second half of the year, in part due to one-off hardware sales not being repeated in the second half of the year," it said.
EOH said significant progress had been made on initiatives relating to closures and the sale of non-core assets which were reasonably advanced but would continue into the new financial year.
The benefit of the initiatives would only be seen in the next financial year, it said, adding that the drag on earnings before interest, tax, depreciation and amortization from some of these businesses undergoing closure has reduced meaningfully during the last six-month period.
"‘It has been a challenging six-month period but the group has made meaningful progress on a number of fronts," CEO Stephen van Coller said.
"I am pleased to have a new board in place with experienced professionals that can work with the executive team and I as we future-proof EOH. I have every confidence that the fundamental strengths of the business and its people will prevail in the longer term notwithstanding the pressures the business is facing."
EOH will publish its full year results on October 15 and also provide a strategic update as well as an update on the status of the ENS forensic investigation.
- African News Agency (ANA)