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Annuities, BEE add to EOH growth

Johannesburg - Specialist IT group EOH [JSE:EOH] on Tuesday attributed a strong set of interim results - featuring revenue growth and increased profits - to high inflows of annuity income and strong black economic empowerment (BEE) credentials.

EOH reported revenue growth of 41% to R787.3m and an increase in profit before tax of 37.7% to R73m for the six months to end-January 2010. Headline earnings per share increased by 29.2% to 70.3c, from 53.9c in the previous corresponding period.

Said CEO Asher Bohbot: "These are strong results and we are understandably satisfied with our performance. We have a solid balance sheet and substantial cash to support future growth and sustainability."

EOH's balance sheet reflects R213m in cash reserves, up 16% from R183.4m in 2009. The company's market cap is R796m.

Bohbot said that services represented a significant area of growth for the company.

"While all divisions performed well, the services business generated the highest revenue with R400m, which accounts for just over 50% of EOH's revenue," he explained.

"There has also been significant growth in the infrastructure business following the recent acquisition of Glacier Consulting," said Bohbot.

In terms of BEE, EOH currently has 34.8% black shareholding and with 60% black representation on its board of directors; it added that 44.6% of its employees are black.

EOH is rated as a level three empowerment contributor, and claims that customers are eligible to claim 138% of any spend with the company. This advantage, according to EOH, has also been key to growth.

Bohbot added that a focus on annuity-based income has also played a key role in the group's success.

To listen to an interview with Bohbot on the group's performance and key growth strategies, click here.

- Fin24.com

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