The technology services group has reported a R1.3 billion loss in 2020 to R150 million profit in 2021.
EOH has reported a massive turnaround from a R1.3 billion loss in 2020 to R150 million profit in 2021. And no one can be more proud than CFO Megan Pydigadu, who says that the “massive swing speaks to the quality earnings EOH has managed to achieve, whilst simultaneously executing on a monumental turnaround operation”.
She explains that EOH’s EBITDA margins have gone from 0 percent to 9 percent, and are close to the group’s long term target of 10 percent. The company’s gross profit margin also improved to 28 percent from 22 percent.
EOH has worked hard to close out legacy contracts and to make targeted disposals over the past two years, which has resulted in more profit from a smaller revenue base of R7.9 billion. Its property portfolio reduced from 56 to 33 and legal entities have reduced to around 145 from 272 thus far.
Megan says that EOH has also made significant progress in simplifying the business by bundling complementary offerings to better serve customers with its end-to-end capability, and creating sustainable cost savings.
“We have what is called Rocket Lab, which is an early stage OP business with the potential to scale these platforms with the right investment,” Megan says. “These include the likes of Impressions Cerebo, which is similar to DocuSign, and Nuvoteq, which is a low code workflow platform that we are already using for our governance processes.”
She adds that EOH also has the ability to utilise its South African market leverage and capability to expand its international footprint. “The Middle East, where we already have a business, is an efficient time zone, with no language barrier. We’re reaching into different skill pools to complement our growth strategy.”
Megan says that EOH’s digital business “sits at the heart of the fourth industrial revolution. We have already seen an acceleration in this space as a result of Covid-19 forcing more and more businesses to adopt a digital journey. We have the ability to facilitate this journey for our customers and solve their needs.”
She concludes that EOH’s focus has been on “doing good business with a focus on quality of earnings, and this is coming through in the group’s improving results and margins”.
