EOH has reported continued financial improvements for the six months ended 31 January 2021.

The revenue of R4 376-million saw a decline, mainly attributable to disposals and legacy contracts. But gross profit margin increased to 27,6% from 24,2% in the prior period.

The group’s total core normalised EBITDA for the period was R363-million, with a normalised EBITDA margin improvement to 8,3% from 7,8% before.

As the business evolves and approaches a steady state, the gap between normalised EBITDA and reported EBITDA continues to narrow, with EBITDA before normalisation adjustments of R329-million for the period.

The group generated a positive operating profit of R59-million, compared to R915-million loss in the prior period.

The total headline loss per share improved by 83%, with losses narrowing from 350 cents per share to 60 cents per share.

Cash remains stable with a cash balance of R440-million as at 31 March 2021.

Stephen van Coller, CEO of EOH, comments: “Our business, while smaller from a revenue perspective due to the strategic disposal of non-core assets and exit of under-performing businesses, is now a more sustainable business delivering better quality of earnings.

“We have seen a significant reduction in one-off costs and are confident that our legacy issues are now under control. The local and global economy remains constrained as we have seen the negative impact on some of our clients.

“However, we have also seen increased cloud uptake and spend on automation and application development in line with global trends since the beginning of the pandemic. Over the coming months, our focus will be on deleveraging, enhancing margins and remaining antifragile.”