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Johannesburg - EOH Holdings [JSE:EOH], a provider of information technology and related services, said it sees significant opportunities to grow revenue from the public sector in both South Africa and the rest of the continent, based on African governments' desperate need for information technology expertise.
“Governments in Africa need our expertise. In Africa government is also often the biggest customer so it’s really the easiest target for expansion on the continent,” CEO Asher Bohbot told Finweek in an interview following the company’s half-year results presentation on Tuesday.
“About a quarter of EOH’s revenue comes from the public sector in SA at the moment and we’d like to grow that.”
The Bedfordview-based company has grown revenues at more than 40% every year since its founding on August 14 1998.
Its interim results released on Tuesday showed that revenue increased by 45.5% to R2.39bn in the six months ended January 31 2013, putting it on course to deliver more than 40% compound sales growth for a fifteenth consecutive year.
“If we extrapolate what we’ve achieved in the first half out to the full year, then we should deliver R5bn at the end of the fiscal year,” said Bohbot.
IT services comprised 69% of EOH’s revenue from 63% a year ago, with infrastructure and software accounting for 16% and 15% respectively. Bohbot said revenue from IT services is likely to grow to between 75% and 80% in the next three to four years.
On the company’s African expansion, Bohbot said it is unlikely that EOH will be able to replicate its phenomenal growth in South Africa on the rest of the continent, even though most African economies are growing at a faster rate.
The main reason cited by Bohbot was that business in most African countries tend to be dominated by large family-run firms, multinational corporations and government.
South Africa on the other hand, consists of what Bohbot described as “thousands and thousands of individual enterprises”. This enabled EOH to construct a customer base in which no single client accounted for more than 3% of revenue.
EOH’s expansion in the rest of Africa would be done through joint ventures or acquisitions of existing businesses in the key East African markets of Kenya and Tanzania, as well as Ghana and Nigeria in the west of the continent, Bohbot added.
“We’re not going to send South African expats there to set up a base,” he said.
The IT group’s half-year results showed that it has R532.51m in cash available for potential acquisitions. One of the areas EOH is targeting for potential purchases is the document management and electronic storage industry, Bohbot said.
- Finweek
For more go to finweek.com or follow Finweek on Twitter.
“Governments in Africa need our expertise. In Africa government is also often the biggest customer so it’s really the easiest target for expansion on the continent,” CEO Asher Bohbot told Finweek in an interview following the company’s half-year results presentation on Tuesday.
“About a quarter of EOH’s revenue comes from the public sector in SA at the moment and we’d like to grow that.”
The Bedfordview-based company has grown revenues at more than 40% every year since its founding on August 14 1998.
Its interim results released on Tuesday showed that revenue increased by 45.5% to R2.39bn in the six months ended January 31 2013, putting it on course to deliver more than 40% compound sales growth for a fifteenth consecutive year.
“If we extrapolate what we’ve achieved in the first half out to the full year, then we should deliver R5bn at the end of the fiscal year,” said Bohbot.
IT services comprised 69% of EOH’s revenue from 63% a year ago, with infrastructure and software accounting for 16% and 15% respectively. Bohbot said revenue from IT services is likely to grow to between 75% and 80% in the next three to four years.
On the company’s African expansion, Bohbot said it is unlikely that EOH will be able to replicate its phenomenal growth in South Africa on the rest of the continent, even though most African economies are growing at a faster rate.
The main reason cited by Bohbot was that business in most African countries tend to be dominated by large family-run firms, multinational corporations and government.
South Africa on the other hand, consists of what Bohbot described as “thousands and thousands of individual enterprises”. This enabled EOH to construct a customer base in which no single client accounted for more than 3% of revenue.
EOH’s expansion in the rest of Africa would be done through joint ventures or acquisitions of existing businesses in the key East African markets of Kenya and Tanzania, as well as Ghana and Nigeria in the west of the continent, Bohbot added.
“We’re not going to send South African expats there to set up a base,” he said.
The IT group’s half-year results showed that it has R532.51m in cash available for potential acquisitions. One of the areas EOH is targeting for potential purchases is the document management and electronic storage industry, Bohbot said.
- Finweek
For more go to finweek.com or follow Finweek on Twitter.
