EOH’s share price took a hit on Friday as the technology group said in a trading statement it expected to report continued losses in its operations for the year to end-July.
EOH’s share price plunged 77% in the past five years, well underperforming the JSE all share index, the broadest measure of SA’s stock market performance, which picked up about 60% in that period.
Operationally, the company has shown flickers of hope and has returned to profitability, though it is struggling to grow revenue.
The group’s losses narrowed in the period. Headline loss per share (HLPS), which exclude the effect of one-off financial events, saw a year-on-year improvement of 98%-100%. The group expects to report a loss of 0.1c-0.3c, compared with the HLPS of 21c in the previous financial year.
Operating profit is expected to be R108m-R118m, from R164m in the previous year.
Expected adjusted earnings before interest, tax, depreciation and amortisation (ebitda) is R300m-R315m, compared to R312m in 2023. At the close of trade on Friday, the share was down 5.7% to R1.82. It is, however, up 27% so far this year.
The group, valued at R1.16bn, has made a concerted effort to salvage its reputation after allegations of malpractice and tender irregularities under previous leadership. It has also been working hard to reduce a mountain of debt accumulated during that period, when it focused on acquisitions.
Disillusioned with the erosion of value at this once-thriving tech firm, shareholders initiated a plan aimed at revitalising it. The strategy includes expanding the iOCO and international unit, cutting unnecessary costs and leadership changes.
Jabu Moleketi, who represents strategic investor Lebashe, is now EOH chair.
The company’s results are due on October 18.
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