JOHANNESBURG - EOH, the JSE-listed tech stock, yesterday shook off its troubles as it reported a stronger balance during the six months ended July, saying its liquidity had improved significantly.
The group said this resulted from the successful implementation of the first phase of a formalised treasury function.
Cash balances grew from R893million of positive cash balances reported at June 3 to R1.004billion of positive cash balances as at July 28.
EOH said the new cash pooling process implemented by the treasury function also made a significant difference to liquidity.
Chief executive Stephen van Coller said: “I am very excited that EOH has returned to a stable and cash generative organisation in such a short period, notwithstanding the negative effects of Covid-19."
EOH, which committed to a R1.6bn de-leverage plan with its lenders effective from May last year, said to date it had repaid the lenders R542m of this target principally from disposal proceeds.
“Disposal proceeds in the current financial year totalled R421m and capital repayments to lenders totalled R292m over the same period,” said the group, adding it had serviced R319m in interest costs on this debt in the current financial year.
The lower outstanding debt balance of R2.5bn, combined with the sizeable reduction in interest rates, would result in materially lower financing costs for the going forward.
EOH informed investors in January that eight of the 54 legacy public sector contracts had negatively impacted the financial performance of the business.
The company said yesterday that the operational and financial viability of these contracts had been closely managed and tracked on an ongoing basis.
“Of the eight contracts one has been exited, two normalised and positive progress is being made with normalising the remaining five contracts,” said the company.
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