Wrap Text
Provisional reviewed condensed consolidated results for the year ended 31 July 2019
EOH HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/014669/06)
JSE share code: EOH ISIN: ZAE000071072
(“EOH” or “the Company” or “the Group”)
SHORT-FORM ANNOUNCEMENT: PROVISIONAL REVIEWED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 JULY 2019
EOH is one of 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.
The Group continues to be an undisputed market leader in its core ICT businesses which operates principally
under the iOCO brand name. The nature of this business is systemic to both the public and private sector and
is an integral technology partner for a number of South Africa’s leading JSE-listed, Blue-Chip companies as
well as key metros and government departments.
Salient features
- Enhanced King IV compliant Board and new executive leadership.
- Strategic focus defined for short-term. Further refinement and assessment of portfolio ongoing.
- Embarked upon a fit-for-purpose capital structure.
- Progress made towards reducing leverage.
- Key financial indicators:
- Continuing revenue – R11 791 million.
- Normalised EBITDA – R792 million.
- Cash of R1 049 million.
- Gross debt reduced by approximately R500 million to R3 167 million.
= Net asset value of R1 957 million.
Reviewed for the year Restated audited for the
ended 31 July 2019 year ended 31 July 2018 % change
Revenue R11 791 million R12 103 million -2.6%
Headline loss per share (including
discontinued operations) 1 681 cents per share 546 cents per share 208%
Loss per share (including
discontinued operations) 2 995 cents per share 1 367 cents per share 119%
Net asset value R1 957 million R 5 937 million -68%
No dividend has been declared for both the 2018 and 2019 financial years.
“The past 12 months have been very difficult for EOH. We have spent extensive time focusing on cleaning up
the business both from a governance and financial perspective as well as understanding the Group’s strategic
capabilities. I have been impressed by the spirit of my colleagues who have worked tirelessly during this
challenging period. While there is much still to do, the path is much clearer. In the short-term we will focus
on continuing to deleverage our balance sheet while implementing governance changes and over the longer
term we remain steadfast in a vision of a more synergised and focused offering that is well positioned to take
advantage of the next wave of change in the ICT industry.” Stephen van Coller, CEO.
Enhanced governance framework
In July 2019, EOH reported that suspicious transaction to the value of R1,2 billion had been identified. The
ENSafrica team has made significant progress on the investigation. They have completed almost 80%
of their investigation into the R1,2 billion identified suspect payments. This amount has since been modified
to R935 million and includes transactions with no evidence of valid contracts being in place or where no work was
done, valued at R665 million; R90 million of loans written off and overbilling valued at approximately R180 million.
The ENSafrica investigation team have also been able to confirm the key modus operandi that was utilised
by the main perpetrators to commit wrongdoing at EOH which involved enterprise development (“ED”)
partners and intermediaries. EOH has suspended payments to and blacklisted 50 ED business partners
implicated in suspect payments. Some of these ED partners have initiated legal challenges against the
company, however EOH is committed to ensuring that all perpetrators of wrongdoing are held accountable
for their actions. EOH is accordingly robustly opposing legal challenges brought by such parties.
The further investigation has confirmed that the main perpetrators of wrongdoing remain confined primarily
to a small group of individuals in the public sector team. Apart from this type of wrongdoing, the investigation
has also identified various opportunistic incidents of fraud and theft to the prejudice of EOH. This has resulted
in the company initiating disciplinary measures which has led to the termination of employment relationships
with a number of individuals.
Based on further information identified from ongoing whistle-blower reports and the ongoing investigation,
the ENSafrica team have assisted EOH in making further reports to the authorities in line with our statutory
reporting obligations. We have provided extensive information to the Hawks and the FIC and we are
supporting and cooperating with the authorities. It is important to emphasise that EOH is actively pursuing
criminal charges as a complainant against various individuals implicated in wrongdoing. The investigation
team is working closely with the authorities to ensure that they are able to identify illicit money flows. EOH
has initiated legal processes to recover losses caused by the perpetrators of wrongdoing.
Auditor’s qualified review report
Mazars (Gauteng) Inc. has reviewed the condensed consolidated financial results for the year ended 31 July
2019 and, based on a disagreement with management in respect of the treatment of adjustments to prior period
restatements, have issued a qualified review opinion thereon, full details of which have been disclosed in the
full announcement published on SENS and the EOH’s. In terms of sections 44(2) and 44(3) of the Auditing
Profession Act, No. 26 of 2005, the auditors have reported reportable irregularities to the Independent
Regulatory Board of Auditors, further details of the matters pertaining to the reportable irregularities are
contained in the full announcement published on SENS and EOH’s website
This short-form announcement is the responsibility of the directors. This short-form announcement is only a
summary of the information in the full announcement and does not contain full or complete details. The short-
form announcement has not been audited or reviewed by the Company's external auditors. Any investment
decisions by investors and/or shareholders should be based on consideration of the full announcement
published on SENS and the issuer’s website as a whole.
The full announcement, which has been released on SENS, is available on the JSE website at:
https://senspdf.jse.co.za/documents/2019/jse/isse/EOH/YE2019.pdf and on EOH’s website at:
https://www.eoh.co.za/investor-relations/financial-results/.
The full announcement is available for inspection at the EOH’s registered office (Block D, EOH Business
Park, Osborne Lane, Bedfordview, 2007) and the offices of the sponsor, Java Capital (6A Sandown Valley
Crescent, Sandown, 2196), at no charge, during normal business hours between Tuesday, 15 October 2019
and Friday, 25 October 2019. Copies of the full announcement may be requested from ir@eoh.com.
15 October 2019
Sponsor
Java Capital
Date: 15/10/2019 08:02:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
