EOH narrows loss per share by 90%

Technology services firm EOH has made an impressive rebound in profitability in the year ending June, with operating profit surging over 90% and a significant reduction in total loss per share. CEO Stephen Van Coller discussed the company's strategy to tackle its debt and drive future growth in a recent interview with CNBC Africa. Van Coller highlighted the company's focus on improving profitability and generating cash flow. Despite facing significant legacy debt, EOH managed to make £292 million in profit and generated £283 million in cash. The CEO emphasized the importance of restructuring the balance sheet by paying off the remaining debt to free up capital for business investments and growth opportunities. One of the key strategies to address the debt burden is a potential rights issue for shareholders to raise additional funds. EOH's strategic partner has already committed to investing an additional hundred million rand, increasing their stake in the company from 13% to 22%. Van Coller expressed confidence in the support and excitement from shareholders, noting that external investors are also showing interest in participating in the rights issue. The company's strong financial performance was driven by a focus on customer relationships and operational efficiency. Van Coller highlighted the importance of staying close to customers and understanding their needs, which led to growth in key business segments. Despite facing challenges such as corruption issues, the COVID-19 pandemic, and other disruptions, EOH managed to streamline operations and improve service offerings. Van Coller emphasized the resilience of EOH's business model, which has undergone significant consolidation to increase efficiency and customer focus. By consolidating 282 businesses into five main units, the company has reduced duplication, improved service delivery, and enhanced resilience in the face of market uncertainties. Looking ahead, Van Coller remains optimistic about future growth opportunities in the ICT industry. He highlighted the trend of digitization driving demand for outsourcing infrastructure and cloud services, areas where EOH is well-positioned to capitalize. The CEO underscored the importance of remaining agile and adaptive in a challenging global economic environment, particularly in the face of potential threats such as global inflation. Overall, EOH's strong financial recovery, debt restructuring efforts, and focus on future growth indicate a positive outlook for the company. With a renewed strategy and the support of shareholders, the firm is poised to capitalize on emerging opportunities in the ICT sector and drive continued success in the coming years.