EOH Holdings has reported an improvement of between 70% and 76% to the previously reported total headline loss per share in a trading statement for the 12 months ended 31 July 2020.
The group generated both positive EBITDA, before normalisation adjustments, and positive operating cash flow for FY2020.
All iOCO core lines of business have performed soundly since the start of the Covid-19 crisis, with gross profit margins remaining above 20%.
Notwithstanding large payments to the lenders, cash balances remain healthy at R943-million as at 19 October 2020.
The improved financial performance was largely as a result of positive progress made towards stabilising the business model while navigating the difficult economic environment brought about by the Covid-19 pandemic.
In addition, work was done towards establishing a fit for purpose cost structure; and the group significantly reduced one-off costs and legacy issues that were a substantial burden on financial performance and cash flow of EOH during the previous corresponding period.
Trading conditions were impacted by the effects of COVID-19 in the second half of FY2020 which placed some EOH customers under pressure and a slight softening of revenue was experienced as a result.
However, progress was however made on key initiatives including optimising cost structures, dealing with legacy issues and delivering on the deleveraging strategy which enabled the Group to post a much stronger H2 2020 financial performance in comparison to H1 2020.
The primary contributing factors to the resilience of iOCO has been the low concentration in the higher impacted industries such as retail, tourism and the SME segment. iOCO has not experienced any major client losses nor retention issues and have continued to make progress on the remediation of the problematic legacy public sector contracts.
In line with global trends across the technology sector, iOCO has seen increased engagement with clients since the onset of COVID-19 as they quickly transitioned to remote working and are embracing the acceleration of digital, automation and other cloud migration initiatives.
Nextec saw the benefits from the turnaround initiatives implemented in H2 2020. Nextec, excluding Pia Solar and Autospec, was self-funding in H2 2020. This positive performance was primarily driven by the new management teams put in place and the exiting of non-core assets that were either too balance sheet intensive in terms of credit lines or had a high risk profile.
The IP assets, which include two B2B2C businesses, were negatively impacted by COVID-19, specifically during Level 4 and 5 lockdowns. These businesses however, still delivered profitable financial performances for FY2020.
Information Services is primarily a consumer facing business and the immediate aftermath of lockdown saw a significant impact on clients. The Covid-19 appropriate modifications to existing digital solutions contributed to business continuity. The business has shown rapid recovery since the implementation of Level 1 and 2 lockdowns and has delivered a profitable financial performance for FY2020.
Sybrin’s financial performance was impacted by some customers in some African territories being unable to transition to remote working as well as new projects being delayed. Despite these factors, Sybrin managed to maintain projected profit margins and financial performance through focused cost management.
While Syntell saw a downward trend in profits over the early months of lockdown, it started to see a recovery to pre-Covd levels from June 2020. Client retention has been excellent during the Covid-19 pandemic but the delay of new tender processes has negatively impacted growth in new customers.