EOH positive results proves the resilience of the technology sector
JOHANNESBURG - The technology sector remains resilient in a tough economic environment and this is evident in tech firm EOH’s annual results where the company reported a 16% increase in profits.
EOH said on Tuesday that it expected continued growth in South Africa, the rest of Africa and the Middle East.
“We will continue to develop, distribute and implement EOH’s niche software and own IP solutions across our existing footprint and into new territories,” it said. “EOH intends to continue its involvement in all tiers of government and state-owned entities to improve service delivery. EOH sees its involvement in the public sector as both a business opportunity and as a responsibility.”
EOH is the largest tech firm in Africa, but still derives more than 90 percent of its revenue from South Africa. EOH’s revenue for the period grew by 21% to R15.5bn compared with R12.8bn last year(2016) with contributions from all businesses across the board. Operating profit increased by 29 % to R1.bn compared with R1.4bn last year.
The company’s operating margins rose from 10.8% to 11.5% as a result of increased software sales, efficiencies and on-going cost containment.
“The effective tax rate has decreased from 29.7% to 28.3% as a result of the utilisation of tax deductions associated with our learnership/intern programmes,” it said.
Earnings before interest, taxes, depreciation, and amortisation rose to R2.3bn from R1.8bn last year. Headline earnings a share gained 16% and earnings a share rose by 17%, with cash reserves increasing by 29% to R2.5bn.
The company declared a gross dividend in respect of the year to July of 215 cents an ordinary share compared with 185c last year.
The group said it would continue to develop new services, products and solutions; meet clients’ technology needs; partner with new vendors locally and abroad; build stronger partnerships with existing customers and provide more technology needs through its strategic account partnership model.
The company said it would be “particularly deliberate in finding suitable businesses to join EOH to complement and supplement our existing solution clusters” in South Africa and the rest of Africa, the Middle East as well as identified emerging markets.
- BUSINESS REPORT