EOH profit surges 31%

A cash dividend of 48 cents per share was declared, up from 36 cents a year ago.

Revenue increased by 43.5% to 2.429 billion rand and profit before tax is up by 56.5% to 234.4 million rand.

The company said the growth is attributable to a combination of both organic growth and recent acquisitions. It added it was satisfied with the performance for the year under review.

"The statement of financial position is strong with substantial cash resources to support future growth and sustainability."

During the year, EOH's primary focus was to increase its Managed Services, Microsoft and Business Process Outsourcing (BPO) Health businesses and accordingly the group made several acquisitions in these areas.

EOH's Managed Services offering was enhanced with the acquisition of TSS Managed Services which focuses on delivering services to the Public Sector. TSSMS was acquired for 130.5 million rand and their results incorporated from 14 June 2011.

The group further expanded its services in the Microsoft infrastructure, applications and development space with the acquisition of the business of Belay Solutions and its subsidiaries for 55.9 million rand. Belay's results have been included from 3 February 2011.

EOH launched its Health BPO service offerings by acquiring the businesses of Elixir Group and Pinnacle Health Solutions for an aggregate purchase consideration of 72 million rand. The results of these operations were incorporated with effect from 1 October 2010.

EOH also broadened its resourcing business through the acquisition of Compensation Technologies Holdings with effect from 1 August 2010 and its Legal BPO service offerings by acquiring CLS Consulting Services with effect from 1 March 2011. The results of these two operations have been incorporated from the effective dates.

EOH also acquired several small businesses in line with its cloud strategy, none of which are regarded as material. No operations were closed off or disposed of during the period.

The group said all areas of its businesses experienced growth during the year with a significant shift to services in line with EOH's strategic intent. Services revenue increased by 66%, software sales increased by 18.1% and infrastructure sales rose by 20.2%.

Looking ahead, EOH's growth strategy will continue to be a combination of organic growth and strategic acquisitions. The main growth areas will be infrastructure and applications managed services, cloud offerings, enterprise applications, BPO, security and facilities management. Major investments will be made in developing EOH's offerings in Africa.

EOH feels that as a South African enterprise it has the responsibility to actively contribute all that it knows and the resources that it has to improving Public Sector delivery. EOH also believes that the Public Sector represents a major business opportunity and if done well, could represent a substantial part of its future growth. In this regard, EOH believes that it is able to add value and contribute to improving the service delivery in the health sector, education, municipalities and other government departments.

EOH has the ability, means and the resources to continue to grow aggressively, it said.

The group has embarked on a major job creation initiative to address the issue of unemployment in SA and it believes that government alone cannot shoulder this responsibility. EOH is creating a team who will work with its top 300 clients and business partners to devise ways and means of creating more jobs and to generate ideas and meaningful plans to develop and train young people.

EOH plans to work jointly with existing government departments to mobilise existing and new job creation initiatives.