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EOH HOLDINGS LIMITED - Unaudited condensed consolidated results for the six months ended 31 January 2019

Release Date: 16/04/2019 08:05
Code(s): EOH     PDF:  
 
Wrap Text
Unaudited condensed consolidated results for the six months ended 31 January 2019

EOH Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1998/014669/06
JSE share code: EOH
ISIN code: ZAE000071072

Unaudited condensed consolidated results for the six months ended 31 January 2019

About EOH
EOH is the largest technology services company in Africa and has a wide range of solutions in Industry
Consulting, IT Services, Software, Industrial Technologies and Business Process Outsourcing.

EOH's 11 000 staff members deliver these services to over 2 500 large enterprise customers across all major
industries throughout South Africa, Africa and the Middle East.

EOH is present in 134 locations in South Africa, and has a growing international footprint with 30 points of
presence. 

As a proudly South African business, EOH is committed to sustainable transformation, making a positive,
meaningful contribution to society, and is a Level 1 Broad-based Black Economic Empowerment (BBBEE) 
contributor.

The EOH Purpose
To provide the technology, knowledge, skills and organisational ability critical to the development and
growth of the markets we serve.

To be an ethical and relevant force for good and to play a positive role in society, beyond normal business
practice.

Key financial indicators
- Available cash of R957 million    
  (R1 418 million)
- Net asset value R4 574 million    
  (R7 462 million)**
- Normalised revenue R8 194 million        
  (R8 193 million)*   
- Normalised EBITDA R387 million
  (R1 088 million)* 
- Market capitalisation R1 855 million***     

  * Restated comparatives for the period ended 31 January 2018 (refer to operating segments for further
    details).
 ** Restated comparatives for the year ended 31 July 2018 (refer to note 5 - Restatement of financial
    statements for the impact of errors on profit or loss and assets and liabilities).
*** At 11 April 2019.

COMMENTARY
"We are committed to building a sustainable, agile and competitive business. This includes preserving 
the future of our business, the country and the futures of a significant number of honest and hardworking 
EOH people" Stephen van Coller, CEO.
  
Salient features 
EOH affirms its commitment to building a sustainable, agile and competitive business
- EOH remains an integral technology partner for major South African corporates as well as key metros and
  government departments.
- New leadership appointed which has:            
  - initiated a significant internal governance review and undertaken remedial action; and
  - conducted an extensive group-wide strategic and balance sheet review.
- Meaningful progress made towards addressing legacy governance issues, future-proofing the business and
  aligning financial performance.

Key financial indicators
- Normalised revenue - R8 194 million (R8 193 million)*
- Normalised EBITDA - R387 million (R1 088 million)* 
- Available cash of R957 million (R1 418 million)
- Net asset value of R4 574 million*.
* Restated (refer to note 5 and the operating segments).

Context
The period under review marks the dawn of a new era for EOH. The appointment of key executive team members,
including a new Group CEO and CFO, a revitalised strategic intent and transparent approach have greatly
assisted the Group in navigating its way through the challenges to date and to set the direction for the future. 

An extensive Group-wide strategic review identified the need to refocus the businesses, including the
identification and ultimate elevation of the IP businesses. Meaningful progress has been made on implementing 
this as well as towards addressing legacy governance issues, future-proofing the business and aligning strategic 
and financial performance. While much of the execution to create focus and additional liquidity is yet to be
concluded, EOH is well positioned to commence the process. 

The Group remains committed to ethical leadership and robust and transparent governance practices. EOH has a
zero-tolerance approach to unethical or fraudulent business practices and is committed to removing any such
activities in a responsible and effective manner. The building of a sustainable, agile and competitive EOH
includes preserving the future of the business, the country and the jobs of the talented and hardworking 
people at EOH. A turnaround of EOH is imperative for driving South Africa's fourth industrial revolution.

EOH is supported by the leading talent in the technology industry. It remains an imperative to ensure 
that the conduct of a few individuals, who may have been implicated in any wrongdoing, does not taint 
the 11 000 strong committed workforce. 

EOH has been in ongoing communication with clients and feedback has overwhelmingly been that their
relationships with EOH are long term in nature and that the service they continue to receive is of the 
highest standards.

Notwithstanding the ongoing challenges, from a financial perspective:
- Revenue remains stable at R8 428 million and operating costs remain flat, after the removal of once-off
  items;
- Normalised EBITDA from continuing operations for H1 2019 is R387 million;
- The net asset value of the Group is R4 574 million, including cash of R957 million as at 31 January 2019;
  and
- The net asset value of the Group remains substantially above the market capitalisation of R1 855 million.

Building the EOH of the future
These last six months, including events post-period end, have been extremely challenging for the Group.

In addition to difficult trading conditions, EOH has been the subject of ongoing governance allegations,
compounded by Microsoft cancelling its Channel Partner Agreement. This has accelerated shareholder value
destruction and raised further questions about historic governance practices. 

With assistance from professional advisory firms, management has instituted a full assessment in terms 
of the Group's compliance, governance and capital structures. 

(i) Skilled and experienced executives in place to drive change
The leadership team of the Group has been bolstered by the appointment of skilled and experienced executives
appointed to drive change. These include:
- Stephen van Coller, Group Chief Executive (started 1 September 2018);
- Megan Pydigadu, Chief Financial Officer (started 15 January 2019);
- Lufuno Nevhutalu, Executive Head for Public Sector in the ICT business (assumed new role 15 March 2019);
- Fatima Newman, Group Chief Commercial Officer (started 8 April 2019); and
- Debbie Millar, Treasury and Investor Relations (started 15 November 2018).

Additionally, the Group has retained the leading talent in the technology industry who are driven to provide
globally best-in-breed technology platforms and services. 

EOH is evolving to ensure fully King IV TM* compliant and aligned boards, both at the operating company level
as well as at the corporate holding company level. At a holding company level these include the appointment 
of two highly qualified and experienced independent non-executive Board members, Ismail Mamoojee and Jesmane
Boggenpoel. Asher Bohbot, founder, non-executive Chairman and CEO for 19 years, and Rob Sporen, founding 
member of EOH and non-executive director have resigned, to assist with King Code Compliance in terms of Director 
independence. A process to appoint an independent Chairman and further independent board members is under 
way at both a Group and operational unit level. 

* Copyright and trademarks are owned by the Institute of Directors in Southern Africa NPC and all of its
  rights are reserved.

(ii) Reorganisation to ensure core businesses remain competitive 
The Group has recently refined its operational structure into four distinct operating units to allow for
leaner and more agile core businesses with separate capital and governance structures. Each Group business 
will be accountable for their own governance as well as risk and compliance, with oversight by their respective
boards. These board appointments are expected to be concluded by 31 May 2019. 

Rothschild & Co, the international investment bank, is working closely with the Group to assist in
reorganising the business for enhanced growth and customer value. Rothschild & Co's experience will add 
immense impetus to the reorganisation process.

(iii) Governance
EOH's work to build a sustainable business that is untainted by unethical practices continues. 

The EOH leadership team, with assistance from legal advisers, ENSafrica, are well progressed in tightening
the Group's governance structures and in implementing a new, streamlined bid approval process. A variety of
governance tools, processes and initiatives are being implemented, aimed at ensuring that any instances of
wrongdoing within the Group are identified and removed. ENSafrica has been spearheading the current 
investigations which are expected to be concluded by 31 May 2019. As part of this process, obligations 
to report irregularities under various Acts will be fulfilled as required. One such report has already 
been filed.

ENSafrica's work to date has included: 
Large public sector investigations - The challenges presented by the EOH public sector business over the
last few years have provided sobering lessons about the importance of stricter governance and compliance
processes. Existing public sector contracts have been ring-fenced to allow for focused governance and 
control and the Group has embarked on a radically different approach to mitigating risk in this area. 
ENSafrica is currently performing a prioritised investigation and accounting investigation into four 
large public sector transactions. 

Furthermore, EOH has been conducting ongoing internal investigations and co-operating with relevant
authorities as EOH address certain activities that may have tainted a very small minority of its business 
contracts over the past few years. 

Enhanced risk and compliance governance framework update - Management has also been working together with
the University of Stellenbosch School of Business to play a supporting role in respect of additional initiatives
to assist in improving governance, managing risk and restoring trust in the EOH brand. A new Code of Conduct
and Anti-Bribery and Corruption Policy has been rolled out across the Group. The Group is also in the process
of becoming ISO 37001 compliant.

(iv) Building a more appropriate capital structure
The Group has historically raised the vast majority of its funding centrally, while permitting the separate
legal entities to manage their own cash and without a corporate treasury function. 

A process to simplifying the operational structure is currently under way and will better enable a more
efficient capital structure that is less dependent on cash balances but consequently also less dependent on 
such large funding facilities. To retain the debt quality, the lower anticipated longer-term sustainable EBITDA 
will also require a lower level of debt. Deleveraging is anticipated to take place primarily from the sale of
non-core assets, following the strategic refocus, and identified assets selling a portion to strategic partners.
Total expected proceeds from the sale of assets over the next three to 12 months are R1 billion, which will be
applied against gross borrowing.

Ultimately, each of the two anticipated remaining operating units and each individually owned IP-based
business will be individually leveraged based on their respective needs and capacity.

The corporatising of the working capital management cycle, including credit control, centralised procurement
and property management is also anticipated to significantly improve these metrics as well as reduce targeted
operating overhead costs. Releasing cash out of debtors is a key priority and a target of releasing 
R1 billion over the next 12 to 18 months has been set.

Ongoing committment
EOH is a business powered by its purpose to provide technology, skills and organisational ability which are
critical to the development and growth of the markets served. The Group remains an ethical, relevant force 
for good and will continue to play a positive role in society, beyond business as normal.

EOH is encouraged by the active support of its clients, technology partners and employees to help build 
the EOH of the future. The Group's commitment to ethical leadership and robust and transparent business 
practices has been reaffirmed and includes preserving the sustainability of the business and the jobs 
of 11 000 committed people. 

Business performance 
The combination of a continued, stressed macro-economic environment and close out of discontinuing projects,
combined with the poor performance from the Middle East and Africa Enterprise Resource Planning ('ERP')
business have negatively affected the results for the six months ended 31 January 2019. 

EOH's revenue from operations remained stable at R8 428 million (2018: R8 354 million). Revenue has been
under pressure in both the International ERP implementation business due to a slowdown in project awards 
and also a slowdown in the NEXTEC Industrial Engineering sector where there have been delays in the  
commencement of infrastructure projects.

Gross margin for the half year reduced from 32% to 20%. The impact on the margin from the prior year is as a
result of continued losses on the close out of large multi-year public sector contracts and the closure of
projects in the industrial technology area related to electrical infrastructure in the water space. Together
this accounted for a 3.4% decline in margin. The International business in the Middle East also faced
difficulties in project execution contributing to a 2.2% decline in the Group's margin. Sales mix contributed 
to a 1.8% decline in Group margin as a result of extraordinary hardware sales. The remaining decline in margin 
is as a result of margin pressure in the ICT business of 3.5% and then underperformance in the Water and 
Energy space resulting in a 1.1% decline.

Operating expenses increased by R2 148 million as a result of once-off items. Once these once-off items are
excluded, operating expenses were flat. Once-off items include impairment of assets of R1 719 million, a 
R157 million IFRS 2 charge related to the Lebashe Holdco and its subsidiaries ('Lebashe') deal and R146 million 
on the disposal of the equity investment in Twenty Third Century Systems ('TTCS'). TTCS has previously been held
as an equity investment. With effect from 17 January 2019 although the percentage holding in TTCS remained
unchanged at 49%, EOH gained effective control of the board. This resulted in a disposal of TTCS as an equity
investment and a subsequent acquisition of TTCS as a subsidiary.

Normalised EBITDA for the period amounted R387 million (2018: R1 088 million). The impact of the previously
discussed once-off items and impacts on gross margin has resulted in a reduction in the profitability
measures. Headline loss/earnings per share (HEPS) and loss/earnings per share (EPS) from continuing operations 
were 973 cents (2018: 314 cents) and 2 073 cents (2018: 320 cents), respectively.

Cash generated from operations after changes in working capital was R82 million (2018: R59 million). 

As part of the half-year review, the balance sheet at 31 July 2018 was reviewed. Impairment indicators were
re-evaluated related to the GCT Group receivable, resulting in a prior year adjustment of R124 million. 
TTCS was also reassessed which resulted in a prior year restatement of R542 million, due to impairments 
booked against the equity-accounted investment, loan receivable and trade receivable.

The Group has a positive net asset value of R4 574 million (2018: R7 462 million) with cash balances of 
R957 million (2018: R1 418 million).

EOH's R1 billion strategic BEE transaction advances
EOH and Lebashe entered into a landmark BEE transaction on 30 July 2018, making EOH one of the largest,
majority black-owned technology companies in Africa. 

On 11 December 2018, EOH shareholders were advised that, following receipt by EOH of R250 million from
Lebashe pursuant to the Second Tranche of the Subscription Undertaking, a further 8 346 199 EOH ordinary 
shares were issued to Lebashe.

Lebashe now holds 62 760 193 EOH ordinary shares, amounting to 29.0% of the total votable EOH shares in
issue and a further 40 million A shares.

EOH is certified as a Large Enterprise BBBEE Level 1 contributor.

Outlook
The Group expects the remainder of the 2019 financial year to be under pressure as a result of a slow-down
in the economy, the delay of large infrastructure projects and the resultant Group reorganisation as a 
result of the new adopted strategy. 

Approved on behalf of the Board of directors of EOH ('the Board').

Stephen van Coller
Chief Executive Officer

16 April 2019


Operating segments
The reportable segments of the Group have been identified based on the nature of the business activities. 
This basis is representative of the internal structure of the Group for management purposes. As mentioned 
in the Group CEO's 100-day update on 11 December 2018, the current structure of the Group is being reviewed.

EOH ICT consists of EOH ICT operations in South Africa, EOH International and certain IP businesses. 
NEXTEC consists of Industrial Technologies, Business Process Outsourcing and certain IP businesses.

Corporate largely comprises head office expenses including salaries, advisor fees and JSE fees, 
among other costs.

Normalised revenue and EBITDA from continuing operations:
                                     Unaudited for the six months to             Restated unaudited* for the six months
                                             31 January 2019                             to 31 January 2018
Figures in Rand thousand      EOH ICT      NEXTEC   Corporate       Total     EOH ICT      NEXTEC   Corporate        Total    
Revenue                                                                                                        
Revenue                     4 634 899   3 793 381           -   8 428 280   4 863 718   3 489 888           -    8 353 606    
Discontinuing                 (62 441)   (171 662)          -    (234 103)   (161 094)          -           -     (161 094)   
Normalised revenue          4 572 458   3 621 719           -   8 194 177   4 702 624   3 489 888           -    8 192 512    
                                                                                                                              
Gross profit                  880 418     786 832           -   1 667 250   1 656 915   1 025 365           -    2 682 280    
Discontinuing                 126 946     157 500                 284 446       1 303           -           -        1 303    
Normalised gross profit     1 007 364     944 332           -   1 951 696   1 658 218   1 025 365           -    2 683 583    
Normalised gross profit (%)      22.0        26.1           -        23.8        35.3        29.4           -         32.8    
EBITDA**                     (283 150)   (177 796)   (329 781)   (790 727)    649 267     386 853     (31 700)   1 004 420    
Discontinuing                 370 142     214 582           -     584 724      88 939           -           -       88 939    
Once-off, cash              
normalisation adjustments      86 912      12 850      83 055     182 817           -           -           -            -    
Non-cash normalisation      
adjustments                   148 654      64 278     197 047     409 979           -           -      (5 180)      (5 180)   
Normalised EBITDA             322 558     113 914     (49 679)    386 793     738 206     386 853     (36 880)   1 088 179    
Normalised EBITDA (%)             7.1         3.1                     4.7        15.7        11.1                     13.3    
 * Comparative figures previously reported have been amended to reflect continuing operations and segments 
   prevailing during the period ended 31 January 2019.
** EBITDA is defined as continuing earnings before interest, tax, depreciation, amortisation, impairments, gains 
   or losses on disposal of businesses and equity-accounted investments and includes profit or loss from 
   equity-accounted investments.

Normalised EBITDA is calculated after considering:
- Discontinuing businesses which have already been identified for closure as part of management's strategic 
  review and includes the completion of the remaining large scale public sector ERP projects, as well as 
  project and electrical infrastructure businesses in NEXTEC (predominantly operating in the water industry).
- Once-off cash normalisation adjustments predominantly comprise R86 million in licence stock, (written off 
  in EOH ICT and EOH International) and once-off advisor fees of R36 million incurred in Corporate.
- Non-cash normalisation adjustments largely consist of the Lebashe IFRS 2 charge of R157 million in 
  Corporate, specific IFRS 9 provisions of R184 million across NEXTEC and EOH ICT and specific IFRS 9 
  provisions of R40 million in Corporate (mainly related to the GCT receivable).

Unaudited for the six months to 31 January 2019             
Normalised revenue         R8 194 177
EOH ICT                    56%
NEXTEC                     44%
                          
Normalised gross profit    R1 951 696
EOH ICT                    52%
NEXTEC                     48%

Normalised EBITDA (Rm) 
EOH ICT                    322 558
NEXTEC                     113 914
Corporate                  (49 679)
HY2019 normalised EBITDA   386 793
   
   
Restated unaudited for the six months to 31 January 2018
Normalised revenue         R8 192 512
EOH ICT                    57%
NEXTEC                     43%
                          
Normalised gross profit    R2 683 583
EOH ICT                    62%
NEXTEC                     38%

Normalised EBITDA (Rm) 
EOH ICT                    738 206
NEXTEC                     386 853
Corporate                  (36 880)
HY2018 normalised EBITDA   1 088 179


Revenue from continuing operations                 
Unaudited for the six months to 31 January 2019    
The following graphs illustrate the disaggregation of revenue by customer industry and by revenue type.
                              
EOH ICT revenue by industry    R4 634 899
Financial services             30%
Public sector                  12%
Telecommunications             11%
Information technology         8%
Health                         7%
Other                          32%

NEXTEC revenue by industry     R3 793 381
Public sector                  22%
Construction                   13%
Health                         12%
Financial services             11%
Telecommunications             9%
Other                          33%

EOH ICT segment revenue type   R4 634 899
Sale of goods                  35%
Rendering of services          65%

NEXTEC segment revenue type    R3 793 381
Sale of goods                  4%
Rendering of services          96%


Restated unaudited* for the six months to 31 January 2018
EOH ICT revenue by industry    R4 702 624
Financial services             27%
Public sector                  13%
Telecommunications             11%
Information technology         8%
Manufacturing and logistics    7%
Other                          34%

NEXTEC revenue by industry     R3 489 888
Public sector                  23%
Mining                         14%
Health                         14%
Construction                   8%
Financial services             8%
Other                          33%

EOH ICT segment revenue type   R4 702 624
Sale of goods                  24%
Rendering of services          76%

NEXTEC segment revenue type    R3 489 888
Sale of goods                  11%
Rendering of services          89%

* Comparative figures previously reported have been amended to reflect continuing operations and 
  segments prevailing during the period ended 31 January 2019.           


Condensed consolidated statement of profit or loss and other comprehensive income or loss
for the six months ended 31 January 2019
                                                               Unaudited            Unaudited           Restated     
                                                                 for the              for the          unaudited*     
                                                           six months to        six months to       12 months to     
Figures in Rand thousand                      Notes      31 January 2019      31 January 2018       31 July 2018    
Continuing operations                                                                                               
Revenue                                                        8 428 280            8 353 606         16 341 024    
Cost of sales                                                 (6 761 030)          (5 671 326)       (11 523 643)   
Gross profit                                                   1 667 250            2 682 280          4 817 381    
Net financial asset impairment losses                           (513 986)             (14 524)          (557 483)   
Operating expenses                                            (4 031 562)          (1 883 572)        (4 118 837)   
Operating (loss)/profit before interest and   
equity-accounted (loss)/profit                   14           (2 878 298)             784 184            141 061    
Investment income                                                 22 575               35 729             52 750    
Share of equity-accounted (loss)/profit           8              (13 950)               6 371             48 223    
Finance costs                                                   (203 246)            (176 548)          (352 145)   
(Loss)/profit before taxation                                 (3 072 919)             649 736           (110 111)   
Taxation                                                        (199 422)            (186 344)          (268 460)   
(Loss)/profit for the period from           
continuing operations                                         (3 272 341)             463 392           (378 571)   
Loss for the period from assets held for      
sale and discontinued operation                  11              (41 194)            (392 450)          (392 450)   
(Loss)/profit for the period                                  (3 313 535)              70 942           (771 021)   
(Loss)/profit attributable to:                                                                                      
Owners of EOH Holdings Limited                                (3 304 029)              67 495           (767 812)   
Non-controlling interest                                          (9 506)               3 447             (3 209)   
                                                              (3 313 535)              70 942           (771 021)   
Other comprehensive income/(loss):                                                                                  
Exchange differences on translating foreign   
operations (may be reclassified)                                  28 236             (152 600)           (48 317)   
Total comprehensive loss for the period                       (3 285 299)             (81 658)          (819 338)   
Total comprehensive loss attributable to:                                                                           
Owners of EOH Holdings Limited                                (3 283 119)             (83 871)          (813 095)   
Non-controlling interest                                          (2 180)               2 213             (6 243)   
                                                              (3 285 299)             (81 658)          (819 338)   
From continuing operations (cents)                                                                                  
(Loss)/earnings per share                                         (2 073)                 320               (260)   
Diluted (loss)/earnings per share                                 (2 073)                 310               (260)   
Including discontinued operations (cents)                                                                           
(Loss)/earnings per share                                         (2 099)                  47               (531)   
Diluted (loss)/earnings per share                                 (2 099)                  45               (531)   
* Refer to note 5 - Restatement of financial statements for the impact on profit or loss.


Headline earnings per share
for the six months ended 31 January 2019
                                                               Unaudited            Unaudited           Restated     
                                                                 for the              for the          unaudited*     
                                                           six months to        six months to       12 months to     
Figures in Rand thousand                                 31 January 2019      31 January 2018       31 July 2018    
(Loss)/profit attributable to owners of                       (3 304 029)              67 495           (767 812)   
EOH Holdings Limited                                                                                                
Adjusted for:                                                                                                       
Loss on disposal of subsidiaries, equity-accounted     
investments and other assets                                     156 686              384 251            392 880    
Impairment of goodwill                                         1 138 413                    -             84 710    
Impairment of other assets                                       580 984                    -            327 140    
Gain on bargain purchase                                               -               (7 988)            (7 528)    
Total tax effects on adjustments                                (134 546)              14 676              4 385    
Headline earnings                                             (1 562 492)             458 434             33 775    
From continuing operations                                                                                          
Headline (loss)/earnings per share                                  (973)                 314                 18    
Diluted headline (loss)/earnings per share                          (973)                 304                 18    
Including discontinued operations                                                                                   
Headline (loss)/earnings per share                                  (993)                 319                 23    
Diluted headline (loss)/earnings per share                          (993)                 309                 23    
Ordinary shares (in thousands)                                                                                      
Total number of shares in issue                                  176 545              152 009            152 797    
Weighted average number of shares in issue                       157 384              143 765            144 597    
Weighted average diluted number of shares in issue**             158 612              148 349            148 450    
 * Refer to note 5 - Restatement of financial statements for the impact on earnings.
** The impact of shares to be issued to vendors, share options and EOH A shares has been included in the 
   weighted average diluted number of shares. However, as they would be anti-dilutive for the period ended 
   31 January 2019 and the year ended 31 July 2018, the diluted loss per share and diluted headline loss 
   per share has been calculated based on the weighted average number of shares in issue.


Condensed consolidated statement of financial position
as at 31 January 2019
                                                                                                        Restated      
                                                            Unaudited at         Unaudited at      unaudited* at      
Figures in Rand thousand                      Notes      31 January 2019      31 January 2018       31 July 2018    
Assets                                                                                                              
Non-current assets                                                                                                  
Property, plant and equipment                                    745 823              683 249            742 983    
Goodwill                                          6            3 185 719            4 335 125          4 255 281    
Intangible assets                                 7              751 922            1 194 235          1 265 220    
Equity-accounted investments                      8              281 921              762 530            530 861    
Other financial assets                            9              146 006              477 952            534 561    
Deferred taxation                                                222 718              294 341            327 270    
Finance lease receivables                                        119 081              154 724            140 511    
                                                               5 453 190            7 902 156          7 796 687    
Current assets                                                                                                      
Inventory                                                        317 729              468 392            431 609    
Other financial assets                            9              225 123              406 118            205 692    
Current taxation receivable                                       84 278              101 489             88 442    
Finance lease receivables                                         59 418               66 978             63 307    
Trade and other receivables                      10            4 834 248            5 921 302          5 374 665    
Assets held for sale                             11              118 045                    -                  -    
Cash and cash equivalents                                        957 106            1 301 951          1 418 319    
                                                               6 595 947            8 266 230          7 582 034    
Total assets                                                  12 049 137           16 168 386         15 378 721    
Equity and liabilities                                                                                              
Equity                                                                                                              
Equity attributable to the owners                                                                
of EOH Holdings Limited**                                      4 853 171            8 221 402          7 433 851    
Non-controlling interest                                        (278 692)              30 448             28 034    
                                                               4 574 479            8 251 850          7 461 885    
Liabilities                                                                                                         
Non-current liabilities                                                                                             
Other financial liabilities                      12            2 143 395            3 115 042          3 208 415    
Finance lease payables                                            45 613               65 550             56 388    
Deferred taxation                                                243 249              450 142            388 042    
                                                               2 432 257            3 630 734          3 652 845    
Current liabilities                                                                                                 
Other financial liabilities                      12            1 109 045            1 317 710            895 581    
Current taxation payable                                         175 193              149 446            149 830    
Finance lease payables                                            40 904               38 815             35 360    
Trade and other payables                         13            3 450 960            2 324 260          2 760 283    
Deferred income                                                  266 299              455 571            422 937    
                                                               5 042 401            4 285 802          4 263 991    
Total liabilities                                              7 474 658            7 916 536          7 916 836    
Total equity and liabilities                                  12 049 137           16 168 386         15 378 721    
 * Refer to note 5 - Restatement of financial statements for the impact on the affected assets and liabilities. 
** In addition, refer to note 4 - Changes in accounting policies for the impact of the adoption of IFRS 9 
   and IFRS 15.


Condensed consolidated statement of changes in equity
                                                                                                         Total                               
                                                               Shares                             attributable                               
                                                                to be                                   to the           Non-                
                                                 Stated     issued to       Other      Retained      owners of    controlling       Total     
Figures in Rand thousand                        capital       vendors    reserves      earnings            EOH       interest      equity    
Audited balance at 1 August 2017              3 333 678     1 013 809     665 937     3 491 764      8 505 188         56 416   8 561 604    
Profit for the six months                                                                67 495         67 495          3 447      70 942    
Other comprehensive loss for the six months                              (151 366)                    (151 366)        (1 234)   (152 600)   
Issue of shares                                 162 950      (128 479)                                  34 471                     34 471    
Non-controlling interest acquired                 1 000                                 (57 410)       (56 410)       (28 181)    (84 591)   
Movement in treasury shares                    (120 955)                      670                     (120 285)                  (120 285)   
Remaining shares to be issued to vendors                      280 603                                  280 603                    280 603    
Consideration - EOH shares forfeited                          (74 549)                                 (74 549)                   (74 549)   
Transfer within equity                                       (207 882)                  207 882              -                          -    
Share-based payments                                                       47 975                       47 975                     47 975    
Dividends                                                                              (311 720)      (311 720)                  (311 720)   
Unaudited balance at 31 January 2018          3 376 673       883 502     563 216     3 398 011      8 221 402         30 448   8 251 850    
Restated loss for the six months                                                       (835 307)      (835 307)        (6 656)   (841 963)   
Other comprehensive income for the six months                             106 083                      106 083         (1 800)    104 283    
Issue of shares                                  56 801       (79 012)                                 (22 211)                   (22 211)   
Non-controlling interest acquired                                                       (48 074)       (48 074)         6 042     (42 032)   
Movement in treasury shares                       9 749                   (53 764)                     (44 015)                   (44 015)   
Remaining shares to be issued to vendors                        8 386                                    8 386                      8 386    
Transfer within equity                                         (2 901)                    2 901              -                          -    
Share-based payments                                                       47 587                       47 587                     47 587    
Restated unaudited balance at                 3 443 223       809 975     663 122     2 517 531      7 433 851         28 034   7 461 885    
31 July 2018*                                                                                                                                
Loss for the six months                                                              (3 304 029)    (3 304 029)        (9 506) (3 313 535)   
Other comprehensive income for the six months                              20 910                       20 910          7 326      28 236    
Issue of shares                                 762 715       (43 380)                                 719 335                    719 335    
Non-controlling interest acquired                                                                                    (300 448)   (300 448)   
Movement in treasury shares                      (9 824)                   (2 205)                     (12 029)                   (12 029)   
Transfer within equity                                        (67 661)                   67 661              -                          -    
Opening balance adjustment relating to                                                                                         
adoption of new accounting standards**                                                 (205 692)      (205 692)        (4 098)   (209 790)   
Share-based payments                                                       43 380       157 445        200 825                    200 825    
Unaudited balance at 31 January 2019          4 196 114       698 934     725 207      (767 084)     4 853 171       (278 692)  4 574 479    
Note                                                 16                                                                                      
 * Refer to note 5 - Restatement of financial statements for the impact on profit and loss and retained earnings. 
** In addition, refer to note 4 - Changes in accounting policies for the impact of the adoption of IFRS 9 
   and IFRS 15.


Condensed consolidated statement of cash flows
for the six months ended 31 January 2019
                                                               Unaudited            Unaudited                
                                                                 for the              for the            Audited    
                                                           six months to        six months to       12 months to     
Figures in Rand thousand                      Notes      31 January 2019      31 January 2018       31 July 2018    
Cash generated from operations                   17               82 365               59 381          1 266 021    
Investment income                                                 22 591               34 163             51 184    
Finance costs                                                   (189 489)            (132 684)          (282 337)   
Taxation paid                                                   (166 987)            (207 486)          (369 688)   
Net cash (outflow)/inflow from               
operating activities                                            (251 520)            (246 626)           665 180    
Cash flows from investing activities                                                                                
Additions to property, plant and equipment                      (107 731)             (88 649)          (261 518)   
Proceeds on the sale of property,            
plant and equipment and intangible assets                         13 779               35 193             63 020    
Intangible assets acquired and developed                         (97 917)            (124 509)          (336 591)   
Net cash outflow from                        
acquisition/disposal of businesses                                (1 281)             (16 767)           (61 452)   
Cash inflow/(outflow) relating to            
other financial assets                                           117 894              (37 180)           (83 187)   
Net cash outflow from investing activities                       (75 256)            (231 912)          (679 728)   
Cash flows from financing activities                                                                                
Proceeds from the issue of shares                                720 282                7 769             10 248    
Proceeds from other financial liabilities                        300 790              504 401            502 849    
Repayment of other financial liabilities                      (1 120 690)            (711 592)        (1 070 477)   
Purchases of treasury shares                                           -             (141 295)          (141 295)   
Finance lease payments                                           (36 277)             (33 817)           (49 592)   
Dividends paid                                                         -             (311 665)          (311 798)   
Net cash outflow from financing activities                      (135 895)            (686 199)        (1 060 065)   
Net decrease in cash and cash equivalents                       (462 671)          (1 164 737)        (1 074 613)   
Foreign currency translation                                       1 458              (39 863)           (13 619)   
Cash and cash equivalents at                 
the beginning of the period                                    1 418 319            2 506 551          2 506 551    
Cash and cash equivalents at the             
end of the period                                                957 106            1 301 951          1 418 319    


Notes to the condensed consolidated financial statements
for the six months ended 31 January 2019

1.  REPORTING ENTITY
    EOH Holdings Limited ('the Company') is a holding company domiciled in South Africa, that is listed on the 
    JSE Limited under the category Technology: Software and Computer Services. The condensed consolidated 
    interim financial statements of the Group for the six months ended 31 January 2019 comprise the Company 
    and its subsidiaries (together referred to as 'the Group' or 'EOH') and the Group's interests in associates 
    and joint ventures.

2.  STATEMENT OF COMPLIANCE
    These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 - 
    Interim Financial Reporting and Financial Reporting Pronouncements as issued by Financial Reporting Standards 
    Council, the JSE Listings Requirements and the Companies Act of South Africa.

3.  BASIS OF PREPARATION
    The accounting policies applied in the presentation of the condensed consolidated financial statements are 
    consistent with those applied for the year ended 31 July 2018, except for the new standards (refer to note 4) 
    that became effective for the Group's financial period beginning 1 August 2018.

    The condensed consolidated interim financial statements have not been audited or reviewed by the Group's 
    external auditors nor have the restated balances at 31 July 2018.

    The condensed consolidated interim financial statements have been prepared on the historical cost basis, 
    except for financial instruments at fair value through profit or loss, under the supervision of 
    Megan Pydigadu CA(SA), Group Chief Financial Officer.

    The comparative financial information in the condensed consolidated interim financial statements has 
    been restated based on information available at 31 July 2018, which was interpreted differently at the time. 
    Refer to note 5 for further information.

4.  CHANGES IN ACCOUNTING POLICIES
    The Group has adopted the following new standards, including any consequential amendments to other standards, 
    with a date of initial application of 1 August 2018:
   
    IFRS 9 - Financial Instruments
    The adoption of IFRS 9 - Financial Instruments has had a material impact on the Group's condensed consolidated 
    annual financial statements at 31 July 2018. The Group has applied IFRS 9 retrospectively, with the initial 
    application date of 1 August 2018 with no adjustments to comparative information.

    The effect of adopting IFRS 9 is:                                                                                  
                                                                      Restated       1 August 2018                    
    Figures in Rand thousand                     Classification         IAS 39       remeasurement         IFRS 9    
    Impairment allowance:                                                                                            
    Other financial assets                       Amortised cost        167 106              35 521        202 627    
    Trade and other receivables                  Amortised cost        447 154             126 826        573 980    
    Contract assets                              Amortised cost              -              37 534         37 534    
    Finance lease receivables                    Amortised cost              -               9 909          9 909    

    The adoption of IFRS 9 fundamentally changed the Group's accounting for impairment losses for financial 
    assets by replacing IAS 39's incurred loss approach with a forward looking expected credit loss approach. 
    IFRS 9 requires the Group to recognise an allowance for expected credit losses for all financial assets not 
    held at fair value through profit or loss and contract assets.

    The additional impairments recognised with regard to other financial assets; trade and other receivables, 
    contract assets and finance lease receivables result in a decrease in retained earnings of R210 million 
    as at 1 August 2018.

    Upon the adoption of IFRS 9, the Group had the following required or elected reclassifications:
    Disclosed as:                                IAS 39 classification         IFRS 9 classification
    Loans and receivables at amortised cost      Amortised cost                Fair value through profit or loss

    The reclassified loans and receivables balances were R10 million.

    There were no changes in classification and measurement for the Group's financial liabilities.

    IFRS 15 - Revenue from contracts with customers
    The adoption of IFRS 15 - Revenue from Contracts with Customers did not have a material impact on the 
    Group's condensed consolidated financial statements. The Group has applied IFRS 15 retrospectively, with 
    the initial application date of 1 August 2018 with no adjustments to comparative information.

5.  RESTATEMENT OF FINANCIAL STATEMENTS
    In February and March 2019, the Group undertook a detailed review of its balance sheet as an integral part 
    of the strategic process, as mentioned in the CEO 100-day update on 11 December 2018, to ensure that the 
    investments in various tangible and intangible assets are appropriately valued.

    Due to the change in management, an error in consideration of the impact of the impairment indicators on 
    the measurement of TTCS Zimbabwe has been re-evaluated as follows:
    - the recoverability of trade receivables and loan balances and the expected cash flows were re-evaluated 
      in terms of IAS 39 resulting in a prior year impairment provision of R208 million for the trade receivables 
      and R43 million for the loans being recognised; and
    - the carrying value of the investment in the TTCS Group was re-evaluated, resulting in an impairment of 
      R291 million being recognised.
                                                                                                        Restated     
                                                              Audited at                            unaudited at     
    Figures in Rand thousand                                31 July 2018         Restatement        31 July 2018    
    Equity-accounted investments                                 452 609            (291 343)            161 266    
    Other financial assets                                        87 087             (42 749)             44 338    
    Trade and other receivables                                  424 204            (208 379)            215 825    

    In addition, an error in consideration of the impact of impairment indicators on the GCT Group receivable 
    has been evaluated and the recoverability of expected cash flows re-calculated in terms of IAS 39, resulting 
    in a prior year impairment provision of R124 million being recognised, after considering any collateral 
    (inventory and debtors).
                                                                                                        Restated     
                                                              Audited at                            unaudited at     
    Figures in Rand thousand                                31 July 2018         Restatement        31 July 2018    
    Other financial assets                                       424 319            (124 357)            299 962    

    The errors have been corrected by restating each of the affected financial statement line items for the 
    prior period as follows:                                                               

    Statement of financial position (extract) as at 31 July 2018
                                                                                                        Restated     
                                                              Audited at                            unaudited at     
    Figures in Rand thousand                                31 July 2018         Restatement        31 July 2018    
    Equity-accounted investments                                 822 204            (291 343)            530 861    
    Other financial assets                                       907 359            (167 106)            740 253    
    Trade and other receivables                                5 583 044            (208 379)          5 374 665    
    Net assets                                                 7 312 607            (666 828)          6 645 779    
    Retained earnings                                          3 184 359            (666 828)          2 517 531    
                                               
    Statement of profit or loss (extract) for the year ended 31 July 2018
                                                                                                        Restated     
                                                              Audited at                            unaudited at    
    Figures in Rand thousand                                31 July 2018         Restatement        31 July 2018    
    Continuing operations                                                                                       
    Gross profit                                               4 817 381                   -           4 817 381    
    Net impairment losses for financial                  
    assets carried at amortised cost                            (181 998)           (375 485)           (557 483)    
    Operating expenses                                        (3 827 494)           (291 343)         (4 118 837)    
    Operating profit before interest and                 
    equity-accounted profits                                     807 889            (666 828)            141 061    
    Profit before taxation                                       556 717            (666 828)           (110 111)    
    Profit for the period from continuing operations             288 257            (666 828)           (378 571)    
    EBITDA                                                     1 390 657            (375 485)          1 015 172    
                                                                                                                
    Basic and diluted earnings per share has been restated as a result of the errors. The impact on earnings per 
    share and headline earnings per share from continuing operations is as follows:
                                                                                                        Restated     
                                                              Audited at                            unaudited at    
    Figures in cents                                        31 July 2018         Restatement        31 July 2018    
    Earnings per share                                               202                (462)               (260)    
    Diluted earnings per share                                       196                (456)               (260)    
    Headline earnings per share                                      278                (260)                 18    
    Diluted earnings per share                                       271                (253)                 18    

    The impact on earnings per share and headline earnings per share including discontinued operations is 
    as follows:
                                                                                                        Restated     
                                                              Audited at                            unaudited at    
    Figures in cents                                        31 July 2018         Restatement        31 July 2018    
    Earnings per share                                               (70)               (461)               (531)    
    Diluted earnings per share                                       (68)               (463)               (531)    
    Headline earnings per share                                      283                (260)                 23    
    Diluted earnings per share                                       276                (253)                 23    

    The restatement adjustments are all non-cash adjustments and therefore do not impact cash generated before 
    working capital changes.

6.  GOODWILL
                                                            Unaudited at        Unaudited at          Audited at     
    Figures in Rand thousand                             31 January 2019     31 January 2018        31 July 2018    
    Opening balance                                            4 255 281           4 625 403           4 625 403    
    Acquired in business combinations                             70 877             347 998             340 255    
    Foreign currency translation                                   3 194             (30 292)              9 268    
    Disposals                                                     (5 220)           (607 984)           (634 935)    
    Impairments                                               (1 138 413)                  -             (84 710)    
    Closing balance                                            3 185 719           4 335 125           4 255 281    
    
    A number of economic, operational and negative events during the six months ended 31 January 2019 had a 
    significant negative impact on EOH's market capitalisation and certain underlying businesses. The Group has 
    also gone through a review of its strategy which has impacted the CGU allocations and the carrying value of 
    goodwill. As a result, the Group performed a half-year review of goodwill for impairment, resulting in 
    impairments of R1 138 million (R311 million in the EOH ICT segment and R827 million in NEXTEC).      

    EOH ICT
    The impairments to goodwill in EOH ICT relate mainly to EOH's public sector-focused ERP businesses. After 
    impairing part of the goodwill in one of these CGUs in FY2018, the remaining goodwill (R144 million across 
    a number of CGUs) was impaired due to continued project complexities, slow debtor recoveries and the impact 
    of no further large ERP projects on the continuing outsourcing business.

    EOH ICT International businesses were impaired by R32 million due to continuing project delivery difficulties 
    in the Middle East and East Africa.

    In addition, goodwill arising on the change of control of the TTCS Group of R70 million was impaired. 
    Refer to note 15 for further details.

    The balance of the of the EOH ICT impairments comprise a number of CGUs which were impacted by the negative 
    events and challenging South African market conditions, resulting in an impairment of R65 million.

    NEXTEC
    Industrial Technologies, a division of NEXTEC, includes a number of impairments:
    - The rail transport technologies CGU was impaired in full (R146 million), due to continuing difficulties 
      in completing active contracts and ongoing delays in starting new contracts which have driven continued 
      underperformance against budgets.
    - Despite project awards and sign-off for various REIPP projects in the energy sector (electricity generation),
      there have been continued delays in award and completion of transmission and distribution projects 
      both in South Africa and Mozambique, resulting in an impairment of R140 million in these CGUs.
    - CGUs providing water infrastructure solutions continue to be impacted by delays in starting delivery on 
      projects in hand, as well as new project awards as a result of public sector funding and administrative 
      delays, which has resulted in continued underperformance to budgets resulting in impairments of R131 million.
    - Margins within the digital infrastructure businesses have also been negatively impacted by original 
      equipment manufacturers selling directly to customers and despite the business adopting a service-based model, 
      expected performance levels have not been achieved resulting in an impairment of R90 million.

    Business Process Outsourcing ('BPO'), a division of NEXTEC, also includes a number of impairments:
    - A number of CGUs which provide employee services, were impacted more than expected by the recent High 
      Court ruling related to temporary staffing. This resulted in decreased customer activity and reduced 
      margins, driving an impairment of R94 million.

    The balance of the NEXTEC impairments relate to a number of CGUs impacted by the negative events and 
    challenging South African market conditions, resulting in further impairments of R95 million in smaller 
    Industrial Technologies CGU's; R50 million in the Health businesses in BPO and a further R81 million in 
    smaller BPO CGUs.

7.  INTANGIBLE ASSETS
                                                            Unaudited at        Unaudited at          Audited at     
    Figures in Rand thousand                             31 January 2019     31 January 2018        31 July 2018    
    Opening balance                                            1 265 220           1 449 296           1 449 296    
    Additions                                                     97 917             124 509             336 591    
    Acquired in business combinations                                  -             126 716             141 801    
    Foreign currency translation                                   6 082              (7 807)               (425)    
    Impairments                                                 (480 691)                  -              (8 665)    
    Disposals                                                     (1 601)           (378 010)           (390 660)    
    Amortisation                                                (134 982)           (120 469)           (262 718)    
    Classified as assets held for sale                               (23)                  -                   -    
    Closing balance                                              751 922           1 194 235           1 265 220    

    Impairments to intangible assets largely relate to:
    - Internally developed software templates of R265 million (focused on municipalities, the water industry; and 
      the waste industry, among others) were impaired in the ICT and International businesses as a result of 
      continued project complexities, slow debtor recoveries and no further large ERP projects being delivered.
    - A R61 million impairment of internally developed, water infrastructure management software, which, despite 
      early success, has not realised the expected market traction given the delays in the award and commencement 
      of contracts in the water industry.
    - Internally developed payroll software was impaired by R46 million as the business strategically shifted to 
      a product agnostic solution offering, from its historic capital intensive software offering. This change 
      was largely as a result of increasing market and customer demands.
    - A further R74 million was impaired for customer relationships and customer contracts after the profitability 
      of the related relationships and contracts deteriorated below expected levels.
    - The remaining impairments relate to other internally generated software in a number of underperforming
      CGUs in which goodwill impairments have been recognised (R35 million).

8.  EQUITY-ACCOUNTED INVESTMENTS                                                                                    
                                                                                                        Restated     
                                                            Unaudited at        Unaudited at        unaudited at     
    Figures in Rand thousand                             31 January 2019     31 January 2018        31 July 2018    
    Opening balance                                              530 861             847 917             847 917    
    Dividends received                                                 -                   -              (3 638)   
    Foreign currency translation                                 (86 027)            (91 758)            (60 298)   
    Foreign currency translation                                                                
    recognised in profit or loss                                  94 547                   -                   -    
    Disposals*                                                  (146 460)                  -                   -    
    Capital contribution                                           3 243                   -                   -    
    Impairment                                                  (100 293)                  -            (301 343)   
    Share of equity-accounted profits                            (13 950)              6 371              48 223    
    Closing balance                                              281 921             762 530             530 861    
    * Refer to note 15 for further information regarding the change of control in the TTCS Group.

    Equity-accounted investments have been impaired by R100 million:
    - R41 million of the impairments relate to EOH's investments in Turkey as a result of increased levels of 
      political and macro-economic risk causing delays in project kick-offs and a deterioration in cash 
      recovery rates.                                                                 
    - Margin erosion, deterioration in pipeline and reduced cash recovery rates triggered an impairment of 
      R40 million in EOH's South American based ERP utilities investment.
    - The remaining impairment of R19 million relates to EOH's Middle East based ERP utilities business which 
      has also suffered a reduction in cash conversion and slower execution of its Saudi Arabian based projects.

    The equity-accounted investments are as follows:
                                                                                                        Restated     
                                                            Unaudited at        Unaudited at       unaudited* at     
    Figures in Rand thousand                             31 January 2019     31 January 2018        31 July 2018    
    TTCS Group                                                         -             396 491             161 266    
    Virtuoso Consulting                                          101 798              89 345             112 636    
    Asay Group                                                    61 726              84 567              80 037    
    Bessertec Group                                               44 235              65 696              80 886    
    Acron                                                         28 763              67 005              40 199    
    Cozumevi                                                      25 156              44 921              35 934    
    Other                                                         20 243              14 505              19 903    
    Total                                                        281 921             762 530             530 861    
    * Refer to note 5 for further information regarding the prior year restatement.

9.  OTHER FINANCIAL ASSETS                                                                                          
                                                                                                        Restated     
                                                            Unaudited at        Unaudited at        unaudited at     
    Figures in Rand thousand                             31 January 2019     31 January 2018        31 July 2018    
    Financial assets at fair value                                                                
    through profit or loss                                        49 162             123 462             138 788    
    Listed equity-linked investments                                   -              84 000              89 020    
    Other financial instruments                                   49 162              39 462              49 768    
    Debt instruments at amortised cost                           321 967             760 608             601 465    
    Amounts receivable from sale of the GCT Group                220 501             493 250             299 962    
    Equity-accounted investment receivables                       40 898             106 756             124 819    
    Enterprise development loan receivables                       17 544              92 027              76 733    
    Other loans and receivables                                   43 024              68 575              99 951    
    Total financial assets                                       371 129             884 070             740 253
    Non-current other financial assets                           146 006             477 952             534 561
    Current other financial assets                               225 123             406 118             205 692    
                                                                 371 129             884 070             740 253

    Financial assets at fair value through profit or loss include investments in listed and unlisted equity 
    shares. Unlisted financial assets are classified as Level 3 and are valued based on discounted cash flows 
    or asset values adjusted for risks inherent in the nature of the underlying operations.

    Impairment allowance
    At 31 January 2019, a total impairment allowance of R240 million (2018: R167 million) has been raised against 
    debt instruments carried at amortised cost.

    An impairment allowance of R193 million (2018: R124 million) was raised for amounts receivable from the sale 
    of the GCT Group. The allowance was raised based on the general approach and considers their current 
    probability of default and collateral provided as security for the loan. The directors are actively engaged 
    in the recovery of the receivables. The receivable from GCT Group is considered to be a stage 3, non-performing 
    receivable.

    The remaining shares receivable (199 257) from the acquirers of the GCT Group were received on 6 April 2019. 
    Certain cash balances remain overdue and outstanding.

    The balance of the impairment allowance is related to the other debt instruments and has been shown net of the 
    gross amount. The allowances raised are based on the general approach, considering the probability of default
    and collateral (if any).

    Refer to note 4 for further information regarding the transition to IFRS 9 and note 5 for further information 
    regarding the prior year restatement.

                                                                                                        Restated     
                                                            Unaudited at        Unaudited at        unaudited at     
    Figures in Rand thousand                             31 January 2019     31 January 2018        31 July 2018    
    Reconciliation of movements of debt instruments                                              
    measured at amortised cost                                                                   
    Opening balance                                              601 465             236 847             236 847    
    Equity adjustment relating to IFRS 9                         (35 521)                  -                   -    
    Net cash paid/(received)                                     (28 873)             22 419              83 187    
    Disposal of businesses                                       (97 441)            499 870             459 163    
    Reclassification to fair value through                                                       
    profit or loss                                                (9 912)                  -              (4 910)    
    Movement in provision for debt instruments                   (95 183)                  -            (186 322)    
    Classified as held for sale                                   (2 733)                  -                   -    
    Other movements                                               (9 835)              1 472              13 500    
    Closing balance                                              321 967             760 608             601 465    

10. TRADE AND OTHER RECEIVABLES
                                                                                                        Restated     
                                                            Unaudited at        Unaudited at        unaudited at     
    Figures in Rand thousand                             31 January 2019        January 2018        31 July 2018    
    Financial instruments                                                                                           
    Trade receivables                                          3 561 056           3 805 760           3 857 664    
    Gross trade receivables                                    4 288 032           3 917 295           4 328 838    
    Provision for credit notes                                   (22 760)            (25 907)            (24 020)   
    Impairment allowance                                        (704 216)            (85 628)           (447 154)   
    Contract assets*                                             943 750           1 743 841           1 107 926    
    Other receivables                                             57 499              74 738              89 916    
    Non-financial instruments                                    271 943             296 963             319 159    
                                                               4 834 248           5 921 302           5 374 665    
    * Contract assets were previously disclosed as work-in-progress.
    
    Refer to note 4 for the transition impact of IFRS 9 on the financial instruments (trade receivables, 
    contract assets and other receivables) and refer to note 5 for further information regarding the prior 
    year restatement.                                                                

11. ASSETS HELD FOR SALE
    On 11 December 2018, the Group announced that opportunities would be explored for the sale of certain 
    non-core assets and as a result of an active programme to locate a buyer for the Mehleketo Group, 
    the associated assets and liabilities have been presented as held for sale. In addition, other small 
    businesses were disposed of during the period.
    The loss for the period from the assets held for sale is analysed as follows:
                                                                 For the             For the               For the     
                                                              six months          six months            six months     
                                                                   ended               ended                 ended    
    Figures in Rand thousand                             31 January 2019     31 January 2019       31 January 2019    
                                                         Mehleketo Group               Other                 Total    
    Revenue                                                      167 844                   -               167 844    
    Cost of sales                                               (170 210)                  -              (170 210)   
    Gross loss                                                    (2 366)                  -                (2 366)   
    Net finance asset impairment losses                           (9 058)                  -                (9 058)   
    Operating expenses                                           (19 075)            (10 395)              (29 470)   
    Investment income                                                 16                   -                    16    
    Finance costs                                                   (136)                  -                  (136)   
    Loss before taxation                                         (30 619)            (10 395)              (41 014)   
    Taxation                                                        (180)                  -                  (180)   
    Loss for the period                                          (30 799)            (10 395)              (41 194)   
    The net cash flows incurred by the Mehleketo Group                                         
    for the relevant periods were as follows:                                                  
    Operating activities                                         (92 709)                  -               (92 709)   
    Investing activities                                          88 116                   -                88 116    
    Financing activities                                           2 183                   -                 2 183    
    Net cash outflow                                              (2 410)                  -                (2 410)   
    Net assets classified as held for sale                       118 045                   -               118 045    
                                                                                                                          
    The discontinued operation (GCT Group) was disposed of during the year ended 31 July 2018, as a result no assets 
    were held for sale at 31 July 2018.



12. OTHER FINANCIAL LIABILITIES
                                                            Unaudited at        Unaudited at            Audited at     
    Figures in Rand thousand                             31 January 2019     31 January 2018          31 July 2018    
    Interest-bearing liabilities                               2 775 049           3 529 770             3 404 595    
    Interest-bearing bank loans secured                                                           
    through security SPV*                                      2 508 303           2 964 406             2 841 518    
    Unsecured interest-bearing bank loans                        248 787             529 793               537 844    
    Interest-bearing bank loans secured by                                                        
    certain property                                              17 959              35 571                25 233    
    Non-interest-bearing liabilities                             477 391             902 982               699 401    
    Vendors for acquisition                                      418 628             824 129               633 709    
    Other non-interest-bearing liabilities                        58 763              78 853                65 692    
                                                               3 252 440           4 432 752             4 103 996
    Non-current other financial liabilities                    2 143 395           3 115 042             3 208 415
    Current other financial liabilities                        1 109 045           1 317 710               895 581   
                                                               3 252 440           4 432 752             4 103 996
    * Larger subsidiaries have pledged cash and trade receivables.
    
    Vendors for acquisition (measured at fair value through profit or loss)
    Financial liabilities measured at fair value through profit or loss are classified as Level 3 as the valuation 
    techniques used are based on unobservable inputs for the liability.

    The vendors for acquisition balance relates to the contingent consideration where business combinations are 
    subject to profit warranties. The profit warranties allow for a defined adjusted value to the consideration 
    payable in the event that the warranted profit after tax is not achieved, or in the event that it is exceeded, 
    an agreed sharing in the surplus. The fair value of the contingent arrangement is estimated by applying the 
    income approach to calculate the present value of the expected settlement. Profit warrant periods normally 
    extend over a 24-month period.

    Unobservable inputs include budgeted results based on margins and revenue growth rates historically achieved 
    by the various segments. Changing such inputs to reflect reasonably possible alternative assumptions does 
    not significantly change the fair value of the vendors for acquisition liability. EOH has an established 
    control framework with respect to the measurement of fair values. This includes a valuation team that reports 
    directly to the Group CEO who oversees all significant fair value measurements.

13. TRADE AND OTHER PAYABLES                                                                                          
                                                            Unaudited at        Unaudited at            Audited at     
    Figures in Rand thousand                             31 January 2019     31 January 2018          31 July 2018    
                                                                                                                      
    Financial instruments                                      2 619 382           1 728 437             1 951 216    
    Trade payables                                             1 431 846             952 657             1 245 207    
    Other accrued expenses                                     1 175 878             734 961               693 164    
    Other payables                                                11 658              40 819                12 845    
    Non-financial instruments                                    831 578             595 823               809 067    
                                                               3 450 960           2 324 260             2 760 283    

14. OPERATING (LOSS)/PROFIT BEFORE INTEREST AND EQUITY-ACCOUNTED (LOSS)/PROFIT
                                                               Unaudited           Unaudited              Restated
                                                                 for the             for the             unaudited     
                                                           six months to       six months to          12 months to     
    Figures in Rand thousand                             31 January 2019     31 January 2018          31 July 2018    
    Operating (loss)/profit before interest from                                                   
    continuing operations                                     (2 878 298)            784 184               141 061    
    Depreciation and amortisation                                235 665             213 865               414 038    
    Impairments of assets                                      1 719 396                   -               411 850    
    Share of equity-accounted (loss)/profit                      (13 950)              6 371                48 223    
    Loss on deemed disposal                                      146 460                   -                     -    
    EBITDA                                                      (790 727)          1 004 420             1 015 172    
    Discontinuing                                                584 724              88 939               362 237    
    Once-off, cash normalisation adjustments                     182 817                   -                     -    
    Non-cash normalisation adjustments                           409 979              (5 180)              320 514    
    Normalised EBITDA                                            386 793           1 088 179             1 697 923    
    Operating profit before interest is stated after                                               
    taking into account the following other items:                                                 
    Employee costs                                             2 871 846           2 764 235             5 722 266    
    Employee share-based payments expense                         43 380              47 976                95 562    
    Lebashe share-based payments expense                         157 445                   -                     -    
    Foreign exchange loss                                        (14 415)              24 791               (32 338)   
    Fair value (gain)/loss on remeasurement of                                                     
    contingent consideration                                     (17 215)            (14 617)               (9 156)   
    Operating lease charges                                      140 796             166 677               280 087    

15. CHANGE OF CONTROL IN INVESTMENT IN ASSOCIATE
    The Group gained control of the TTCS Group of companies ('TTCS') on 17 January 2019 as a result of the board 
    of directors of TTCS being reconstituted to afford EOH 60% of the voting rights. The direct and effective 
    shareholding in each entity was unchanged.

    TTCS provides system integration, product delivery, maintenance and support services predominantly to customers 
    in Zimbabwe and is focusing on growing operations in Zambia, Malawi, Kenya, Uganda, Rwanda, Tanzania, Ghana, 
    Botswana and Nigeria, as well as other project delivery in sub-Saharan Africa.

    As a result of the deemed disposal of the investment in TTCS, a loss on disposal of R146 million was recognised. 
    This loss was as a result of the Group's reliance on the Zimbabwean operations and the recent and continuing 
    disruptions within Zimbabwe, as well as the impact of the changes in local currency.

    The (loss)/profit for the period from the deemed disposal is:
                                                                                 Five months            Six months     
                                                                                       ended                 ended     
    Figures in Rand thousand                                                31 December 2018       31 January 2018    
    Share of (loss)/profit for equity-accounted associate investments                (14 297)               10 263    
    Non-cash, once-off, accounting loss on deemed disposal of associates*           (146 460)                    -    
                                                                                    (160 757)               10 263    
    * The value of the TTCS Group is based on a valuation of the current shareholding and the following key 
      assumptions:
      - a four-year forecast for the TTCS Group's operations;
      - a weighted average cost of capital of between 17.0% and 23.6% (depending on the country of operation);
      - a terminal growth rate of 2.1%; and
      - discounts of 10% to 30% for a lack of marketability and the current illiquid nature of the investments which 
        increased significantly as a result of the recent deterioration in local currency, as recognised through 
        the Old Mutual Implied Rate.

    The businesses were valued at approximately R64 million at 31 December 2018. Conservatively, as a result of 
    the continuing uncertainty regarding Zimbabwe and the new currency, management's expectation is that dividends 
    are not likely to be paid in the medium to long term. Therefore, conservatively when calculating goodwill and 
    the loss on disposal, an enterprise value of Rnil has been used.
    
    The subsequent deemed acquisition of the TTCS Group impacts the Group as follows:                                 
    Figures in Rand thousand                                                                      31 December 2018**    
    Fair value of assets and liabilities acquired                                                                     
    Non-current assets                                                                                      37 148    
    Current assets                                                                                          48 590    
    Non-current liabilities                                                                                      -    
    Current liabilities (including minority portion of EOH payables)***                                   (387 346)   
    Net liabilities acquired                                                                              (301 698)    
    Non-controlling interests measured at their share of the fair value of 
    net assets/value of the TTCS Group (including minority portion of EOH payables)***                     300 448    
    Amount capitalised                                                                                      (1 250)    
    Goodwill                                                                                                70 877    
    Goodwill impairment                                                                                    (70 877)    
    Net cash outflow*                                                                                       (1 250)    
      * Given the nature of the acquisition, there is no additional consideration payable.
     ** The fair value of the assets and liabilities acquired has been translated to ZAR based on an Old Mutual 
        Implied Rate of 2.79 at 31 December 2018 for TTCS Zimbabwe, resulting in a negative net asset value as 
        the majority of the Group's loans and trade payables are denominated in foreign currencies, while current 
        assets are predominantly USD RTGS based. The loans of R86 million and trade payables of R480 million 
        payable to EOH at 31 December 2018 are included in current liabilities and have been eliminated against 
        trade receivables and loans on consolidation.                              
    *** Minority proportion of EOH payables are eliminated on consolidation.
                                                                                                           For the    
                                                                                                     six months to    
    Figures in Rand thousand                                                                       31 January 2019    
    Contribution to trading results for the period                                                                      
    Revenue                                                                                                 83 049    
    Profit before tax                                                                                        2 369    
    Contribution had the effective date been 1 August 2018                                                                      
    Revenue                                                                                                 96 584    
    Loss before tax                                                                                         (4 229)   

    There were no acquisition-related costs during the six months ended 31 January 2019 included in operating 
    expenses in the statement of profit or loss and other comprehensive income.

    The contribution of the trading results of the TTCS Group have been accounted for from the effective date 
    of the business combination. The accounting of these subsidiaries is based on best estimates and provisional 
    fair values. The Group has not completed its assessment of the fair value of all identifiable assets, 
    liabilities and/or contingent liabilities. The fair values will be accurately determined within 12 months 
    from the acquisition date.

16. STATED CAPITAL
                                                               Unaudited           Unaudited                    
                                                                 for the             for the               Audited     
                                                           six months to       six months to          12 months to     
    Figures in thousands                                 31 January 2019     31 January 2018          31 July 2018    
    Issued                                                                                                            
    Reconciliation of the number of shares in issue:                                                                  
    Opening balance                                              152 797             150 095               150 095    
    Shares issued for cash*                                       22 495                   -                     -    
    Shares issued as a result of the acquisition                                                 
    of businesses                                                  1 203               1 503                 2 207    
    Shares issued to the Group's share incentive                                                 
    and retention schemes                                             50                 411                   495    
    Shares in issue at the end of the period                     176 545             152 009               152 797    
    Less:                                                                                                             
    Treasury shares held in the Group's share                                                    
    incentive schemes                                             (2 357)             (2 370)               (2 367)   
    Treasury shares held by wholly owned                                                         
    subsidiaries of the Company                                                                  
    that will not be cancelled                                    (5 870)             (5 616)               (5 530)   
                                                                 168 318             144 023               144 900    
    EOH A shares of no par value:                                                                                     
    Shares issued as a result of the Lebashe                                                     
    BBBEE transaction*                                            40 000                   -                     -    
                                                                  40 000                   -                     -    
    * The Lebashe transaction was approved by shareholders on 18 September 2018 and effectively implemented on 
      1 October 2018. Since the date of approval Lebashe has:
    - invested R750 million in three tranches in EOH ordinary shares based on a 30-day VWAP at a 10% discount 
      for an average share price of R33.59; and
    - received 40 million unlisted EOH A shares which will be redeemed in five years on 1 October 2023 through 
      an ordinary share issue. The A shares rank equal to an EOH ordinary share in respect of voting rights and 
      each EOH A share will receive cash dividends in an amount equal to the value of 15% of dividends paid to 
      EOH to ordinary shareholders. The remaining 85% of the dividend value will be accrued and redeemed through 
      the redemption of the A shares. Despite the variability in number of EOH ordinary shares that will be issued, 
      the obligation to Lebashe is treated as an equity transaction as the settlement will be undertaken in 
      ordinary shares and the transaction is therefore within the scope of IFRS 2.

    The related IFRS 2 share-based payment charge of R157 million has been recognised in the statement of 
    profit or loss.
                                                               Unaudited           Unaudited                    
                                                                 for the             for the               Audited     
                                                           six months to       six months to          12 months to     
    Figures in Rand thousand                             31 January 2019     31 January 2018          31 July 2018    
    Opening balance                                            3 443 223           3 333 678             3 333 678    
    Shares issued for cash                                       713 115                   -                     -    
    Shares issued as a result of the acquisition                                                
    of businesses                                                 48 430             156 182               210 503    
    Shares issued to the Group's share incentive                                                
    and retention schemes                                          1 170               7 768                10 248    
    Treasury shares                                               (9 824)           (120 955)             (111 206)   
                                                               4 196 114           3 376 673             3 443 223    

17. CASH GENERATED FROM OPERATIONS
                                                                                                                        
                                                               Unaudited           Unaudited              Restated         
                                                                 for the             for the             unaudited* 
                                                           six months to       six months to          12 months to        
    Figures in Rand thousand                             31 January 2019     31 January 2018          31 July 2018    
    (Loss)/profit before taxation from:                       (3 113 933)            273 575              (486 272)   
    Continuing operations                                     (3 072 919)            649 736              (110 111)   
    Discontinued operations                                      (41 014)           (376 161)             (376 161)   
    Adjustments for:                                                                                                  
    Depreciation and amortisation                                238 619             202 041               425 861    
    Impairment of assets                                       1 719 396                   -               411 850    
    Loss on disposal of subsidiaries and property,                                                  
    plant and equipment                                          156 685             384 251               392 880    
    Share-based payments expense                                 200 825              47 976                95 562    
    Net finance costs                                            180 791             143 230               301 806    
    Net financial asset impairment losses                        523 044                   -               557 483    
    Inventory write-off/impairment                                86 912                   -                     -    
    Deferred income non-cash movement                           (131 614)                  -                     -    
    Other non-cash items                                           6 358               3 382              (106 650)   
    Cash (consumed)/generated from operations before                                                           
    changes in working capital                                  (132 917)          1 054 455             1 592 520    
    Working capital changes net of effects of                                                       
    disposal of subsidiaries                                     215 282            (995 074)             (326 499)   
    (Increase) in inventories                                    (27 147)            (37 195)                 (411)   
    (Increase) in trade and other receivables                   (431 909)           (349 293)             (424 746)   
    (Increase) in contract assets                                 80 973            (375 270)              260 644    
    Increase/(decrease) in trade and other payables              604 690            (232 760)              258 429    
    (Decrease)/increase in deferred income                       (11 325)               (556)              (56 419)   
    Cash generated from operations                                82 365              59 381             1 266 021    
    * Refer to note 5 - Restatement of financial statements for further information.

18. CONTINGENCIES AND COMMITMENTS
    The Group has issued guarantees and performance bonds from various Group companies as well as through available 
    third-party facilities. At this stage, the Group is not aware of any guarantees or bonds issued which may be 
    exercised by holders. The balance at 31 January 2019 was R528 million (2018: R425 million).
    
19. CHANGE IN DIRECTORATE
    During the period since 1 August 2018 there were several changes to the Board:
    - Stephen van Coller was appointed as Group Chief Executive Officer effective 1 September 2018.
    - John King resigned as Group Financial Director effective 3 October 2018.
    - Megan Pydigadu was appointed as Group Chief Financial Officer effective 15 January 2019.
    - Asher Bohbot resigned as non-executive Chairman effective 28 February 2019.
    - Rob Sporen resigned as lead independent non-executive director effective 28 February 2019.
    - Tshilidzi Marwala resigned as non-executive director effective 28 February 2019.
    - Jesmane Boggenpoel was appointed as interim Chairperson effective 22 March 2019.
    - Tebogo Maenetja resigned as executive director effective 31 March 2019.
    
20. EVENTS AFTER THE REPORTING DATE
    Assets held for sale
    As mentioned in the CEO 100-day update on 11 December 2018, the Group is considering disposing of certain 
    businesses. Various disposal processes are expected to be realised before 31 July 2019, but have not met 
    the criteria to be recognised as assets held for sale by 31 January 2019.

    To date, agreements have been reached for the sale of a number of smaller businesses for an estimated 
    total consideration of R100 million resulting in an estimated loss on disposal of R37 million.

    Other
    As announced on 19 February 2019, EOH initiated investigations into public sector contracts entered 
    with the support of ENSafrica. This includes investigations related to Microsoft contracts referenced 
    in the SENS. The investigations continue around four large public sector contracts and are expected to 
    be concluded by 31 May 2019.      

    Microsoft issued a notice of termination in respect of EOH's channel partner agreement, and cancelled 
    the related partnership agreements. Further details regarding this development were provided in the 
    SENS issued on 25 March 2019.


CORPORATE INFORMATION

Directorate
Non-executive
Jesmane Boggenpoel (appointed interim Chairperson effective 22 March 2019) 
Ismail Mamoojee
Moretlo Molefi 
Pumeza Bam 
Asher Bohbot (resigned as Chairman effective 28 February 2019)
Rob Sporen* (resigned as Lead Independent Non-executive Director effective 28 February 2019)
Tshilidzi Marwala (resigned as Non-executive Director effective 28 February 2019)
* Dutch

Executive
Stephen van Coller (appointed as Group Chief Executive Officer effective 1 September 2018) 
Megan Pydigadu (appointed as Group Chief Financial Officer effective 15 January 2019)
Zunaid Mayet (resigned as Group Chief Executive Officer effective 31 August 2018)
John King (resigned as Group Financial Director effective 3 October 2018)
Tebogo Maenetja (resigned as HR Director effective 31 March 2019)

Group Company Secretary
Adri Els

Registered address
Block D, EOH Business Park
Osborne Lane, Bedfordview, 2007
PO Box 59, Bruma, 2026
Telephone: +27 (0) 11 607 8100
Website: http://www.eoh.co.za
Investor email: debbie.millar@eoh.com

Sponsor
Java Capital Trustees and Sponsors Proprietary Limited
Registration number: 2006/005780/07
6A Sandown Valley Crescent, Sandton, 2132
Johannesburg
PO Box 522606, Saxonwold, 2132

Transfer secretaries
Computershare Investor Services Proprietary Limited
Registration number: 2004/003647/07
Rosebank Towers, 15 Biermann Avenue
Rosebank, 2196
PO Box 61051, Marshalltown 2107

Auditors
Mazars (Gauteng) Inc.
Registration number: 2000/026635/21
Erasmus Forum A, 434 Rigel Avenue South
Eramusrand, Pretoria, 0181

Release date
Tuesday, 16 April 2019

Date: 16/04/2019 08:05:00 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.

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