Trading statement for the six months ended 31 January 2020
EOH HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/014669/06)
JSE share code: EOH ISIN: ZAE000071072
(“EOH” or “the Group”)
TRADING STATEMENT FOR THE SIX MONTHS ENDED 31 JANUARY 2020
- Improvement of at least 64% to the previously reported total loss per share
- Total cash balances remain consistent with prior comparative periods as liquidity remains stable
- Core iOCO business performed well, with gross profit margins above 20%
- The Group continues to make good progress in working through remaining, inherited legacy issues
Shareholders are advised that, EOH expects an improvement of at least 64% to the loss per share (“LPS”) and an
improvement of at least 47% to the headline loss per share (“HLPS”) for the Group for the six months ended
31 January 2020 (“H1 2020”) compared to the previous corresponding period, being the six months ended 31 January
2019 (“H1 2019”), as further detailed in the table below.
The reported H1 2019 financial results were unaudited and prepared prior to the finalisation of the consolidated
annual financial statements for the year ended 31 July 2019 (“2019 AFS”) and require restatements to align with the
2019 AFS. These restatements relate primarily to revenue recognition, asset capitalisation and subsequent recovery
and timing of recognition of liabilities.
As a result of EOH’s ongoing deleveraging strategy, which is primarily focused on asset disposals, the H1 2020 and
H1 2019 comparative results have been further adjusted for the required IFRS reclassification of certain businesses
as discontinued, most notably being, Dental Information Systems Holdings Proprietary Limited (“Denis”) and two
of the IP businesses.
H1 2020 H1 2019 LPS and HLPS H1 2019
Anticipated LPS (restated)2 LPS and HLPS
and HLPS (as previously reported)1
LPS: Total Loss of no more than 750 Loss of 1 689 cents per Loss of 2 099 cents per share
operations cents per share share
LPS: Continuing Loss of no more than 600 Loss of 1 706 cents per Loss of 2 073 cents per share
operations cents per share share
HLPS: Total Loss of no more than 525 Loss of 827 cents per share Loss of 993 cents per share
operations cents per share
HLPS: Loss of no more than 500 Loss of 844 cents per share Loss of 973 cents per share
Continuing cents per share
Before taking into account the restatement for H1 2019 described above and the reclassification of Denis and two of the IP businesses as
After taking into account the restatement for H1 2019 as described above and the reclassification of Denis and two of the IP businesses as
The Group is approximately twelve months into a turnaround plan that is expected to take at least two years. Good
progress on key strategic initiatives in respect of the evolving business model, cost savings and capital structure
initiatives has continued over the past six months. The Group continues to work through remaining, inherited legacy
issues. These include the limited group of identified public sector contracts together with non-core underperforming
Nextec businesses and the interest burden associated with the inherited debt. The Group has further identified a need
for a cost optimisation program which has resulted in 21 rental properties being exited in the last six months as well
as reduction of more than 1,000 people through business as usual efficiency measures. Following sound progress and
exceeding the R1 billion target within twelve months, management is continuing with disposals in line with its stated
Total cash balances remain consistent with prior comparative periods as liquidity remains stable.
The iOCO business has performed well evidenced by a stabilisation of the core business and the contracting sales
pipeline with gross profit margins above 20% for the period under review, before taking account of the public sector
contracts mentioned above. The public sector remains important for the Group, however, 8 of the public sector
projects remain problematic out of the 54 originally identified as requiring attention. Management is actively working
with these customers to remedy the pertinent issues.
The IP businesses also performed well over the period, recording sound revenue growth as well as retaining gross
profit margins above 30%. As has been previously communicated to the market, the majority of these businesses are
being disposed of in order to normalise the capital structure and are classified as discontinued. Significant progress
in this regard has been made. Non-binding offers have been received and the process is ongoing.
Nextec remains challenging, with the majority of these businesses unlikely to form part of the Group going forward.
More than 40 businesses have been sold or closed since 31 January 2019.
While the recent global outbreak of COVID-19 may have an impact on the business, it is difficult to quantify with
any certainty, the magnitude of the impact at this time. The Group has a crisis team in place monitoring this on a
daily basis to ensure that issues arising are managed proactively and in a socially responsible manner.
EOH will publish its interim results on or about 7 April 2020 and the results will be presented via a webcast in light
of the COVID-19 outbreak.
The financial information on which this trading statement is based has not been reviewed and reported on by the
Group’s external auditors. EOH will publish a further trading statement once it has the reasonable degree of certainty
required to confirm the exact extent of the difference from the H1 2019 results.
19 March 2020
Date: 19-03-2020 04:21:00
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