EOH Looks to Raise $33m as it Returns to Profitability

EOH Looks to Raise $33m as it Returns to Profitability

Technology services company, EOH, which is listed on the SE, has announced it returned to profitability in fiscal year 2022. The company also stated it plans to raise up to $33M (R600 million) to pay off most of its bridge facility. Lebashe Investment Group, the group’s strategic partner, will raise the money through an $27M (R500 million) rights issue and an extra $6M (R100 million) through a broad-based black economic empowerment agreement.

Since Lebashe acquired equity through an R1 billion capital injection in 2018, the company has become EOH’s long-term strategic partner. EOH has struggled with debt for a while, but for the past two years, it has been meeting its financial payments.

EOH announced profitability for the fiscal year that ended in July and stated that plans for an impending capital raise to improve its financial structure had been finalized. The company’s drive to raise funds is a result of its intensified efforts to minimize debt.

Despite the ongoing challenging local and global trading environment, EOH performed successfully during the current reporting period and further revalued its balance sheet. A 92% increase in total operating profit to R282 million from R147 million in 2021 is one of EOH’s year’s highlights. Operating profit from ongoing activities increased by 82% for the company to R100 million. The total loss per share improved by 91% to 15 cents during the period from R55 million the prior year (166 cents for FY2021). EOH also made notable progress on its financial obligation, with R733 million of debt repaid to lenders.

“Following an intense turnaround period, EOH is now efficiently streamlined and profitable; and for the first time, has board-approved investment spend for growth. I would like to extend a huge thank you to our customers and staff who have enabled us to achieve this huge milestone,” comments Stephen van Coller, EOH Group CEO.

Regarding the intentions for development, EOH stated that exciting prospects were emerging in the United Kingdom, portions of Europe, Egypt, and the Middle East as it hopes to expand its footprint.

“Our focus is on creating centres of excellence internationally, pursuing mid-market clients, and ensuring that there is an appropriate movement of IP and skills across the geographies in which the group operates.

“With the finalisation of our capital raise, management will be able to focus on recapturing market share in South Africa and expanding EOH’s presence in East and West Africa, the Middle East and Europe. We are well positioned to take advantage of the exponential shifts in the world today, which creates an opportunity to be an attractive digital transformation enabler for our customers.”

 

Author

  • Joel Nwankwo

    Storyteller and Data analyst. Passionate about startups and innovators leveraging tech to promote financial and social inclusion in Africa and for Africans

Joel Nwankwo

Storyteller and Data analyst. Passionate about startups and innovators leveraging tech to promote financial and social inclusion in Africa and for Africans

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