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Johannesburg - Consulting, technology and outsourcing firm EOH Holdings is moving into information technology security and aiming for public sector tenders to increase market share.
CEO Asher Bohbot estimated EOH held less than 10% of the South African market share. "If we continue at the same rate of growth, we should reach 20% market share," he said.
EOH reported its results on Monday, crossing the R1bn revenue line for the first time. The company reported a 32% increase in revenue year on year from R950m in 2008 to R1.2bn for the year to end-July 2009.
Its bottom line showed an increase of 24% to a profit of R76m after tax from R61m in the previous comparable period.
"The sentiment is very good around South Africa. There are blips here and there, but the IT sector is generally in good health," Bohbot said.
Internet security
EOH has clients that are predominantly from the financial services industry such as Absa and Standard Bank. IT security - more specifically, internet banking security - is one of the most crucial elements of its business.
"We have a set of security products we are bundling into a separate business unit to provide products and consulting services for these clients under one roof," Bohbot said.
The business unit started operating on September 1 2009.
Public sector
Although EOH already offers consulting services and some infrastructure maintenance to government, Bohbot sees a lot of growth potential in the public sector.
He said the 2010 FIFA World Cup was set to fuel companies' needs for infrastructure that would remain in place for servicing after the World Cup had ended.
"Our entry into the public sector will be reliant on both our specific technology and our expertise in the services arena," Bohbot said.
In January, EOH became the sole representative of Nasdaq-listed management software company Computer Associates International (CA), the fourth-largest software vendor in the world.
This is one of the product ranges EOH is hoping the South African government will buy into.
"The public sector technically operates the same way as the private sector.
"It faces the same challenges and has the same needs. We weren't focused on it in the past, but it is something we will aggressively pursue in 2010," Bohbot said.
Other expansion opportunities
EOH said it was looking at acquisitions to go along with the organic growth it was nurturing. Investors at Monday's results presentation pushed Bohbot on when he planned to make an acquisition, saying its large cash balance of R206m was a "war chest" ready to be spent.
But Bohbot would not be drawn on details. "When it happens, it happens. You cannot force an acquisition," he said.
He said EOH was not looking so much at highly distressed assets up for sale, but rather at healthy businesses that had been tested in the economic recession and could add value to EOH.
"We are looking at annuity-based businesses and generically all those businesses that can bring us into a new space or enhance the services we already offer," Bohbot said.
Chief financial officer John King said EOH turned away businesses when the management culture did not mesh with EOH's. "We don't buy business, we buy businesses," he told Fin24.com.
- Fin24.com
