Thursday, September 6, 2018

EOH eyes return to past performance after difficult year

EOH says it expects to increase revenue by 8% to approximately R16.3 billion for the year ended July 2018.
Normalised EBITDA from continuing operations is expected to be between R1.71 billion and R1.94 billion, reflecting a decrease of between 15% and 25% compared to R2.28 billion for the previous corresponding period.
Headline Earnings per share is expected to be between 250 cents and 374 cents reflecting a decrease of between 55% and 70% compared to 832 cents for the previous corresponding
period.
Normalised Headline Earnings per share from continuing operations is expected to be between 438 cents and 558 cents, reflecting a decrease of between 30% and 45% compared to 797 cents for the previous corresponding period.
“Although challenging, the past year has re-focussed, energised and strengthened the business and made it more resilient,” EOH said, adding that a new strategy, structure and operating model will enable the business to return to past performance.
The year under review was a year of two different halves, the group said. The disposal of the GCT group of companies in the first six months had a negative impact on earnings of R399 million (non-cash, once-off deduction).
“Fake news stories adversely impacted the business necessitating intense stakeholder engagement,” it said.
“In view of EOH’s specific market challenges during the period, the Group adopted a deliberate customer retention strategy whilst sacrificing some margin.
“As a result of the above, fewer major contracts were awarded to the EOH Group adversely impacting the business in the second half of the 2018 financial year,” it said.
During the second six months, EOH Group was reorganised into two independent focussed businesses, EOH and NEXTEC, creating two growth platforms, each with its own identity, brand and strategy.
The increased focus on working capital management resulted in a reduction of accounts receivable and an improvement in cash compared to the 2018 half-year interim results, it said.
“Over the last three months, the EOH Group has seen a marked increase in the number of large contracts awarded to it indicating the normalisation of business activities,” EOH said.

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