Press Releases Archives - EOH

PRESS RELEASE: EOH is pleased to report a continued improvement in performance with a 35% increase in operating profit from continuing operations

Nyeleti.Machovani@iOCO.tech — Wed, 18 Oct 2023 07:30:47 +0000

EOH is pleased to report a continued improvement in performance with a 35% increase in operating profit from continuing operations

Highlights for the year ended 31 July 2023 include:

EOH generated a 35% increase in operating profit from continuing operations to R135 million
The successful rights issue and capital raise allowed for R678 repayments in debt and the restructuring of debt facilities with a single lender at significantly reduced interest rates
Group net debt now stands at R683 million.
Gross margins maintained at 28% for the year despite deteriorating market conditions
R94 million invested in growth initiatives
Restructured operations into key pillars aligned with executives responsibilities under new long-term contracts

Despite a deteriorating local economy and significant headwinds in the public sector, EOH’s continuing operations managed to deliver revenue growth of 3%, an increase in operating profits of 35% and a halving of net loss after tax from R160 million in FY2022 to R81 million for the year ended 31 July 2023.

At a divisional level, the International business delivered excellent growth of 23% in revenue largely driven by the Group’s Middle East operations. This solid performance flowed through to an EBITDA level with a 41% increase to R56 million. The IT Infrastructure business has also delivered good growth of 15% driven by new client acquisitions in the mid-market space as the business continued to tailor its offerings. Our Digital Enablement business also showed good growth at 7% as it continued to see customers accelerate their digital strategies.

The turnaround in the EasyHQ business was completed during the year and this division recorded a 33% increase in EBITDA to R121 million despite experiencing a 5% reduction in revenue as unprofitable contracts were closed out over the 12 month period. EasyHQ houses the Group Risk and Compliance “as-a-service” IP that has been created over the past four years and is an exciting business for EOH’s platform growth.

The biggest remaining challenges are in the Enterprise Applications and Software Reseller Business and the Nextec Infrastructure and Consulting businesses. Both these divisions have new leadership and are core focus areas for 2024.

Stephen Van Coller, group CEO, commenting on the results said “It has been another year of improvement and great change at EOH with the successful capital raise and restructuring of our debt facilities, re-alignment of our operations into autonomous pillars and over R90 million invested into growth initiatives. Despite the deteriorating market conditions and lack of public sector spend and SOE technology investment, our businesses have delivered solid improvements in profitability and are well positioned to continue this trend as our growth strategy and operating model gain traction.”

Van Coller has agreed to extend his initial five year contract for another six months but has asked the Board not to consider an extension beyond the 31^st of March 2024 at which time he will officially retire from the Board. Van Coller says: “It has been quite a journey and not what I expected when I accepted the CEO role in 2018. Nevertheless I am immensely proud of what we have achieved as a team. EOH today is a sustainable company which lies at the heart of South Africa’s ICT ecosystem and plays an important role in everyone’s lives. It has great potential both locally and internationally, and now is an appropriate time to hand over to new leadership to guide the company through this next chapter.”

Stephen will, however, remain available to the Board after the 31^st of March, as required, to help with a smooth leadership transition and to complete any projects that require his continued involvement.

Following group CFO, Megan Pydigadu’s resignation, as announced on the 25^th of July 2023, the Board has appointed Marialet Greeff as the Interim Group Chief Financial Officer. Greeff has been with the Group since 2019 and is currently the Group Executive for Treasury, Tax and Regulatory Finance. Marialet is a CA(SA) and has played an integral role in both the finance function and the restructuring and turnaround process since joining EOH in 2019.

The successful rights offer has, in addition to largely rectifying EOH’s capital structure, has also given the EOH Board the freedom to consider the next chapter for the Group. EOH Board Chairman Andrew Mthembu says: “We are hugely grateful to both Stephen and Megan for their leadership which has resulted in a sustainable, growing business. As EOH has changed its strategic focus and significantly decentralised its head office functions over the past year the Board has the necessary time to undertake a thorough skills assessment as part of the recruitment of a new CEO and CFO. Importantly to ensure business continuity the Board has signed four year contracts with the heads of the respective operational businesses namely Marius De Larey, Brian Harding and Fatima Newman.”

Please see attached the full SENS announcement.

For media enquiries please contact:

Janine Gertzen Janine@theNielsenNetwork.com +27829238054

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PRESS RELEASE: EOH generates R110 million in operating profit for the first 6 months of FY2023 compared to R100 million for the full 12 month period ended July 2022

Nyeleti.Machovani@iOCO.tech — Wed, 05 Apr 2023 06:54:11 +0000

EOH is pleased to report sustained operating profitability during the 6 months ended 31 January 2023 and the subsequent deleveraging of the Group’s balance sheet post the capital raise after the half year end.

Highlights for the period include:

R110 million in operating profit from continuing operations, compared to the R100 million for the full year end 31 July 2022
Revenue from continuing operations increased 8% despite a challenging local operating environment
Gross profit margins remain stable at 29%
R48 million invested into the business as part of our GET strategy
R600 million new capital raised post half year end used to reduce debt levels to R673 million, creating an efficient capital structure and a significantly reduced interest charge going forward
Cash balances at 31 January 2023 of R234 million and a normalised debt structure with a single bank

Despite the challenging operating environment EOH achieved revenue growth of 8% for the period with sustained operating profitability. The largest operating division, Digital Enablement led the way with a 20% increase in revenue and 24% increase in EBITDA at improved margins. The international diversification strategy delivered benefits with the Middle East, Europe and UK businesses showing excellent growth of over 45% to R257 million. At 33% of our Digital Enablement revenues, the international operations are becoming key contributors.

The IT Infrastructure Services, Enterprise Apps & Software and Infrastructure Solutions divisions all saw pleasing revenue growth over 10%. The Operational Technologies business had a challenging trading period primarily due to delays and the inability to close SOE contracts, resulting in a 10% reduction in revenue. This business is fairly reliant on SOE’s and mining in South Africa but diversification initiatives have started with investments into West and East Africa through the exclusive AVEVA rights, as well as a focus on manufacturing and FMCG clients in South Africa.

With the improved operating performance and outlook in FY2022, the Board was able to approve an R80 million strategic investment into the business of which R48 million has been invested in the first 6 months. Additionally the recent successful capital raise significantly reduces interest charges. Going forward, EOH will further accelerate its organic growth strategy, especially on the back of the pleasing results being seen on the initial investments.

Looking forward, the EOH executive and Board is excited with the momentum that has built over the past 6 months. Compared to the previous six month period (H2-2022) all key metrics have improved, with revenue increasing 5%, gross profit 13%, adjusted EBITDA 112% and profit after tax 82%.

Furthermore, with the completion of the asset disposal process to deleverage the company, EOH now has a stable portfolio of businesses with a coherent go-to-market strategy. The Group will approach the market through four key product pillars; namely Digital Enablement, IT Infrastructure Services, Operational Technologies and EasyHQ. The International business outside of Sub-Saharan Africa will focus mainly on Digital Enablement and selling of own IP Platforms. The Executive Committee has also been aligned along these pillars, improving efficiency and accountability in our reporting structures.

Stephen van Coller, EOH Group CEO commented: “Having successfully completed our capital raise to normalise EOH’s capital structure, I am excited we can now turn our full attention to our Growth-Efficiency-Talent strategy. Our initial growth investments are showing great results and we will continue to build on this momentum, whilst maintain our focus on cost efficiencies and making EOH the employer of choice in the IT industry. We look forward to the next phase of our journey working with our many clients to enhance their business through industry leading information and digital technologies.”

For the SENS announcement please follow the link https://www.eoh.co.za/investor-relations/sens/ and to view our results presentation please follow the results presentation link

Ends.

5 April 2023

For any media queries please contact:

Aprio Strategic Communications

Michael Rubenstein

michael@aprio.co.za

0829037797

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PRESS RELEASE: EOH announces final terms of rights offer

Nyeleti.Machovani@iOCO.tech — Thu, 19 Jan 2023 09:00:54 +0000

19 January 2023, Johannesburg: Today EOH released the final terms of its rights offer and its specific issue of shares to its strategic investment partner Lebashe Investment Group.

Salient points

On 13 December 2022 at the Company’s EGM, EOH shareholders voted unanimously for EOH to proceed with the rights offer.
The combined capital raise from the rights issue and specific issue will amount to R600 million.
EOH has received irrevocable undertakings from existing shareholders representing 30% of the issued shares to follow their rights in full.
EOH has underwriting agreements with Aeon Investment Management Proprietary Limited, Anchor Capital Proprietary Limited and Visio Capital Management Proprietary Limited to subscribe for any shares that have not been subscribed for by existing shareholders.
The irrevocable undertakings to follow rights and underwriting commitments have de-risked the process and guarantees that R600 million will be raised.
The rights offer issue price of R1.30 represents a discount of approximately 30% to the theoretical ex-rights price (“TERP”) which is in line with the average discount to TERP of the last ten rights offers of similar sized offerings relative to market capitalisations.
Given the structure of the rights issue all existing shareholders who follow their rights will experience no dilution in their shareholding.
The proceeds of the rights offer and specific issue will be used to settle the majority of the senior bridge facility, reducing interest payments by approximately R100 million per annum. Further, Standard Bank of South Africa Limited (acting through its Corporate and Investment Banking division), has, subject to a successful conclusion of the capital raise and fulfilment of conditions precedent, approved new long-term facilities of R700 million and general banking facilities of R500 million to replace the existing debt, which significantly reduces the margin above JIBAR that EOH pays (for details click here). This brings the facilities in line with normal corporate facilities available in the market and significantly reduces the onerous administration of a four-lender syndicate.

EOH Group CEO Stephen van Coller said “We are excited to have secured the success of the capital raise through the support of our major shareholders and interested underwriters. In the context of the legacy issues that the existing business has had to solve, namely the significant debt burden complicated by rising and onerous interest rates, repayments to OEM’s and the Special Investigating Unit (SIU), the significant support shown by existing and new shareholders is testament to the turnaround of EOH and the quality of the underlying core remaining businesses. It was always a strategic imperative to fix the capital structure of the business in order to take full advantage of the opportunities EOH has through its leading technology offerings and world class skills base. The rights issue and the resultant refinancing of the debt package as outlined will normalise the capital structure for EOH as promised to the market. Furthermore, our international certification as a TOP EMPLOYER underlines our global standard of people practices and further reinforces our ability to attract and retain great talent.”

EOH’s results for the financial year ended 31 July 2022 demonstrated a continued significant improvement in the financial performance of the business and its return to operating profitability, which has continued into the first five months of the 2023 financial year. Key highlights are: –

An 80% increase in continuing operating profit from FY21 to FY22 to R100 million
Continuing Revenue increase of 17% in H2 2022 compared to H2 2021
Continuing Revenue for the five months to December 2022 is ahead of budget and grown in excess of inflation
Continuing Gross Margins and adjusted EBITDA margins for the five months to 31 December 2022 remain in line with FY22

As a result of this financial performance the Board and management considered it appropriate at this time to complete the turnaround and solve for the inefficient capital structure through an equity capital raise, which was unanimously supported and approved by shareholders.

EOH is pleased to report that the rights issue has been de-risked through the support of major shareholders providing irrevocable undertakings to follow their rights, as well as underwriting commitments from both existing and new shareholders to subscribe for any shares not taken up by EOH shareholders.

Over and above their commitment to follow their rights, Lebashe has signed an irrevocable undertaking to subscribe for R100 million new EOH shares, being 76,923,077 shares at the rights offer issue price of R1.30. Lebashe’s shareholding in EOH after the rights issue and specific issue will be approximately 23.5%.

The terms of Lebashe’s A-share shareholding have been amended and extended to 30 September 2028, enabling and incentivising Lebashe to add value as a strategic partner to EOH and extending the life of the empowerment transaction, and the resultant benefits thereof to EOH, by five years. Lebashe’s voting interest including its A-shares will be approximately 30%, further securing EOH’s Level 1 BBBEE status.

Andrew Mthembu, Chairman of the EOH Board, said “I am extremely proud of this team and thrilled by the vote of confidence in EOH demonstrated by all stakeholders, including our existing shareholders, the underwriters and our now single banker. EOH has a strong investment case and I urge shareholders to consider following their rights and maintain their economic interest in EOH. I would particularly like to thank the Lebashe Investment Group for their continued support and belief in EOH. As a Board, we are looking forward to this next stage of our journey unhindered by the large legacy debt and interest burden and focusing on the growth of the business for the first time in many years.”

Megan Pydigadu, EOH CFO, added “Securing the success of the rights issue and capital raise will bring significant and immediate benefits to EOH. We will save approximately R100 million per annum in interest charges based on current interest rates, freeing up resources to invest in numerous exciting growth opportunities. It has been an arduous journey to get here, and I would like to thank all our stakeholders, in particular our customers and partners who have supported us throughout together with our 5000-plus staff members for their patience and tenacity in continuing to deliver world class technology solutions under very trying and uncertain circumstances.”

For the full terms of the rights offer please refer to the SENS announcement on 19 January 2023, here.

For Media queries or interviews please contact:

Aprio Strategic Communications

Michael Rubenstein

michael@aprio.co.za

0829037797

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PRESS RELEASE: EOH gains Top Employer status by building an empowering workplace

Nyeleti.Machovani@iOCO.tech — Tue, 17 Jan 2023 07:15:01 +0000

Johannesburg – The EOH Group is proud to announce that it has received Top Employer certification from the Top Employers Institute, the global authority on recognising excellence in people practices. The accolade demonstrates that EOH is succeeding in building a forward-thinking workplace that allows its diverse People to grow and thrive. It also signals that the Group is well-equipped to implement its growth strategy in 2023.

“It is a great honour for EOH to receive this coveted certification,” says EOH CEO Stephen van Coller. “The award indicates that our improved people and culture practices are in line with the highest global standards and that we are well on our way to making EOH one of the coolest places to work in the tech industry.”

“The Group is committed to building a culture and work environment where our people feel valued and have the opportunity to realise their potential. We have worked hard on our Employee Value Proposition as we believe our people are our key asset. So we are delighted that we have been recognised by a reputable global organisation as a business that puts its people first.”

EOH participated in the Top Employer programme to benchmark itself against international best people practices and obtain a roadmap for continuous improvement of its employee value proposition.

Malisha Awunor, EOH Group Head People and Culture, says this is only the start of EOH’s journey to become the most attractive place to work in the tech industry. “In future, EOH will work on enhancing these people best practices, and tailoring our culture to support our diverse people. The Group recognises the individuality of its people and follows a personalised approach to meeting their needs.”

“This award adds further credibility to the Group’s People survey results that showed 88% of respondents are proud to work at EOH and 84% of leavers would return to EOH for the right role.”

The certification as Top Employer is no mean feat. The process involves a detailed audit of a company’s performance across six Human Resources elements made up of 350 sub areas based on supporting evidence.

What is highly encouraging is the Group’s performance against global best practices in the following areas: business strategy, people strategy and leadership; and ethics and integrity and diversity and inclusion.

The Group’s outperformance in the areas of business strategy, people strategy and leadership can be attributed to its programmes and initiatives aimed at supporting and developing people in the company.

In the area spanning diversity and inclusion, EOH shone for its efforts to create a workplace where everyone is respected for being their true selves and doing their best work as a result. The Group has established an array of forums and platforms to this end, and it is a signatory to leading United Nations principles which promote these objectives.

“The Group considers all facets of its people in engaging them,” says Awunor. “EOH is building a workplace where we enable, grow, include and care for our people.”

MEDIA RELEASE ENDS

For media enquiries, contact:

Tessa.Kruger@eoh.com

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PRESS RELEASE: Lebashe agree to significantly increase strategic stake in EOH

Nyeleti.Machovani@iOCO.tech — Fri, 11 Nov 2022 16:35:27 +0000

Johannesburg: 11 November 2022: EOH’s recently released positive annual results for the year ended 31 July 2022 reflect a major milestone in the successful execution of EOH’s turnaround strategy.

• EOH generated a total operating profit of R282 million for the year ended 31 July 2022 following a total operating profit of R147 million for the year ended 31 July 2021, an increase of 92%;
• cash generated from operations was equivalent to 100% of operating profit;
• operating profit from the Company’s continuing operations improved 82% on a restated basis to R100 million in FY2022 from R55 million in FY2021; and
• the Company recorded an improvement of 91% in total loss per share to 15 cents for the year ended 31 July 2022 from 166 cents in the preceding year.

As announced at the recent results presentation EOH is now proceeding with an equity capital raise of up to R600 million. The net proceeds of the capital raise will enable the Group to restructure its balance sheet which will result in a fit for purpose capital structure allowing the Company to focus on its well defined growth strategy.

Lebashe Investment Group, EOH’s strategic partner since 2018, has signed irrevocable undertakings to follow its rights on the shares it currently owns, which represent 13.06% of the issued share capital, as well as invest a further R100 million through a specific share issue. The combined investment is a clear vote of confidence in EOH’s future and strategy.

EOH CEO Stephen van Coller said: “We are thrilled by Lebashe’s additional investment into EOH. Lebashe has been an
incredibly supportive partner throughout the Group’s challenging turnaround journey. It is extremely pleasing to see
our strategic partnership deepening as we shift gears to Growth.”

Please refer to the detailed SENS announcement for further details here.

For Media queries or interviews please contact:

Aprio Strategic Communications
Michael Rubenstein
michael@aprio.co.za
0829037797

The post PRESS RELEASE: Lebashe agree to significantly increase strategic stake in EOH appeared first on EOH.

EOH, the Special Investigating Unit and the Department of Water and Sanitation conclude settlement agreement

Nyeleti.Machovani@iOCO.tech — Fri, 11 Nov 2022 11:15:22 +0000

Johannesburg: 11 November 2022: The new EOH board and management has, over the last four years since appointed, taken its investigation into allegations of corruption and irregularities concerning it seriously. In this regard the EOH Group has transparently and publicly implemented robust actions to identify wrongdoings and has provided extensive co-operation with law enforcement and regulatory agencies including the Special Investigating Unit (SIU).

Upon learning, in February 2019, of certain transgressions of several previous employees and board members of EOH between 2015 and 2017, the new board and management of EOH instructed independent law firm ENSafrica to significantly extend the scope of the forensic investigation into the suspected wrongdoing covering a period from 2012 to 2018. From inception of the ENSafrica forensics investigation, EOH has transparently and proactively reported wrongdoing to the authorities having submitted eight section 34 reports to the SIU between May 2019 and June 2020 and made detailed submissions to National Treasury and SITA as well as the Financial Intelligence Centre.

On 31 May 2019, EOH reported the wrongdoing to National Treasury and proposed to compensate the State for identified irregularities regarding the Department of Water and Sanitation (DWS) contract. As part of this process, and after having concluded the full detailed analysis, EOH proactively made contact with the SIU in July 2020 to discuss firstly, what the analysis uncovered, secondly what work was done for value and thirdly to discuss compensation for aspects of the contract where no value was derived in respect of the DWS contract.

On the 5 August 2021 there was a Government announcement regarding the SIU’s Proclamation for an investigation focusing on the procurement of, or contracting and implementation of four Information Technology (IT) contracts that were awarded between 2012 and 2017 by the Department of Water and Sanitation (DWS) to EOH Mthombo, (a wholly owned subsidiary of EOH), to the value of R474 million.

EOH and the SIU engaged over several meetings and discussions with a view to unpacking the details of the analysis and as outlined above, to agree a quantum for the portion of the contract where EOH Mthombo received undue benefit for the aforementioned DWS contract.

After further engagements, the SIU, DWS and EOH reached agreement on an amount which all parties believed to be fair and equitable. The terms of the agreement are set out as follows:

An initial upfront payment of cR65m which relates to duplicated software licenses which will be refunded; and
The remainder of an amount of cR112m to be paid over a period of 36 months commencing in January 2023.

As disclosed in previous communications, SENS and results announcements, EOH has fully provided for this settlement in its financial accounts and confirms that it will have no impact on the Company’s income statement.

EOH Group Chief Executive Officer Stephen van Coller said “The EOH Board and Executive leadership express their gratitude to the SIU and DWS for their professional engagement and in working with EOH to reach a settlement agreement, and in so doing concluding on the legacy contract issues related to the ENSafrica forensic investigation and the DWS matter in particular.”

The new EOH leadership remains committed to doing business ethically as well as being a good corporate citizen.

For Media queries or interviews please contact:

Aprio Strategic Communications

Michael Rubenstein

michael@aprio.co.za

0829037797

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EOH delivers 92% increase in operating profit

Nyeleti.Machovani@iOCO.tech — Thu, 27 Oct 2022 05:09:53 +0000

27 October 2022, Johannesburg: EOH is pleased to report sustained operating profitability during the year ended 31 July 2022 and further deleveraging of its balance sheet despite the continued tough local and global trading environment. EOH has finalised plans for its upcoming capital raise to optimise its capital structure.

Highlights for the year include:

92% increase in total operating profit to R282 million (R147 million in FY2021)
82% increase in operating profit from continuing operations of R100 million (R55 million in FY2021)
91% improvement in total loss per share (“LPS“) to 15 cents for FY2022 (166 cents for FY2021). But for an increased provision required on the Department of Water and Sanitation legacy issue, EOH would have reported a total profit per share for the year.
R733 million of debt repaid to lenders.
Cash generated from operations of R283m
Cash balances at 31 July 2022 of R459 million, with unutilised direct short-term facilities of R250 million

EOH intends to go to market shortly to raise up to R600 million through a R500 million rights issue and an additional R100 million BBBEE deal by the Group’s strategic partner, Lebashe Investment Group. The proceeds will be used to settle the majority of the bridge facility and will leave the Group with a fit for purpose capital structure and allow management and staff to focus on the Group’s exciting growth potential.

EOH’s growth engines comprise iOCO Digital which taps into the 4IR market trends, iOCO Operational Technologies which directly aligns with the rapid growth area of the OT/IT intersection and has opportunities into East and West Africa and IOCO Infrastructure Services which creates the ideal platform for clients to outsource their IT infrastructure. All of these businesses are currently significant contributors to both revenue and profit.

EOH’s own IP companies are the foundation of exciting future growth potential as they are ready for local and geographic expansion and scaling. They will be housed together under Rocketlab Ventures to allow separate partnerships and investment as appropriate.

As we expand our geographical footprint of our centres of excellence exciting opportunities are developing in the United Kingdom, parts of Europe, Egypt and the Middle East. Our focus is on creating centres of excellence internationally, pursuing mid-market clients, and ensuring that there is an appropriate movement of IP and skills across the geographies in which the Group operates.

Stephen van Coller, EOH Group CEO commented: “Following an intense turnaround period EOH is now efficiently streamlined and profitable and for the first time has board approved investment spend for growth. I would like to extend a huge thank you to our customers and staff who have enabled us to achieve this huge milestone.”

EOH continues to deliver end-to-end IT solutions to its almost 5000 clients and remains a partner of choice as they accelerate their digitisation journeys. With the finalisation of our capital raise, management will be able to focus on recapturing market share in South Africa and expanding EOH’s presence in East and West Africa, the Middle East and Europe. We are well positioned to take advantage of the exponential shifts in the world today, which creates an opportunity to be an attractive digital transformation enabler for our customers.

For the SENS announcement please follow the link https://www.eoh.co.za/investor-relations/sens/ and to watch the EOH results presentation please follow the link https://www.eoh.co.za/results

Ends.

26 October 2022

For Media queries or interviews please contact:

Aprio Strategic Communications

Michael Rubenstein

michael@aprio.co.za

0829037797

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EOH appoints Ziaad Suleman as Chief Commercial Officer

Nyeleti.Machovani@iOCO.tech — Wed, 23 Jun 2021 16:00:47 +0000

23 June 2021, Johannesburg: EOH, one of the largest technology services companies in Africa, is delighted to announce that Ziaad Suleman will join the EOH Executive Committee on 1 July 2021 as the Chief Commercial Officer for iOCO – EOH’s Systems Integrator and largest business, reporting into EOH’s Group Chief Executive Officer, Stephen van Coller. Ziaad will spearhead iOCO’s sales strategy to provide the market with best-in-class solutions for both the private and public sectors.

Stephen van Coller, EOH Group Chief Executive Officer said of the appointment, “I am extremely excited to have someone of Ziaad’s calibre with his extensive experience in the ICT industry across sub-Saharan Africa, joining our business. His appointment complements our already strong executive team. The fact that we can attract such senior talent to EOH is testament to our distinctive value proposition as well as the digital transformation opportunities that we are pursuing as the world emerges from COVID-19. Ziaad’s background is a perfect fit for EOH as the Group drives towards a profitable and ethical business.”

Ziaad has a postgraduate honours degree in Law with distinction from the University of Natal. He also obtained a Business Management (MDP) with distinction from the GIBS Business School.

Ziaad spent 13 years at IBM, with the initial seven years as the Head of Legal and the last six years as the Chief Operations Officer across Southern Africa, being on both IBM South Africa’s Board of Directors and Executive Committee. In addition, Ziaad chaired the company’s Social and Ethics committee as well as the Disciplinary board. In his role he was integral to the successful growth and development of IBM’s business in the region.

Ziaad’s core areas included Transformation and Operations, Strategy, Special Projects and Investments, Sales Transaction Support, BEE, and the establishment of a Local Delivery Centre and Digital Lab. Prior to joining IBM, Ziaad spent three years with Business Connexion (BCX).

Ziaad is extremely active in the ICT space. He represents South Africa as the SA Chair of the 4IR Digital Economy committee on BRICS, he also co-chairs the ICT 4IR Public Private Growth Initiative (PPGI) Presidential Business Advisory group and is the Lead of the PPGI Digital Skills Portfolio. Ziaad is passionate about community development through his roles as the independent Non-Executive Chairperson of Qode, the Chairperson of the Parktown Girls Governing Body and is also a Non-Executive Director of Charities Aid Foundation Southern Africa.

About EOH

EOH is one of the largest technology services companies in Africa and has a wide range of solutions in Industry Consulting, IT Services, Software, Industrial Technologies and Business Process Outsourcing. The Group continues to be an undisputed market leader in its core ICT businesses which operates principally under the iOCO brand name. The nature of this business is systemic to both the public and private sector and is an integral technology partner for a number of South Africa’s leading JSE-listed, blue-chip companies as well as key metros and government departments. It’s other business, NEXTEC collaborates with world-leading technology providers to design, implement and manage intelligent value-adding infrastructure and people solutions that make a positive and lasting impact.

The Group’s 7000 employees deliver services to over 5000 enterprise customers across all major industries throughout South Africa, Africa, Europe and the Middle East. As a proudly South African business, EOH is committed to sustainable transformation, making a positive, meaningful contribution to society, and is a Level 1 Broad-based Black Economic Empowerment (‘B-BBEE’) contributor.

For media enquiries or interviews, please contact:

Michael Rubenstein – Aprio
082 903 7797
michael@aprio.co.za

Head of EOH Investor Relations and Group Communications
Zihle Nonganga
zihle.nonganga@eoh.com

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EOH disposes of 100% of the issued share capital of Sybrin Limited (Guernsey) and Sybrin Systems Proprietary Limited

Nyeleti.Machovani@iOCO.tech — Tue, 08 Jun 2021 17:00:02 +0000

8 June 2021, Johannesburg: EOH today announced it has entered into a share purchase agreement for the sale of Sybrin Limited to a consortium group comprising of One Thousand & One Voices Management (Mauritius) Ltd (“1K1V”) and Crossfin Technology Holdings (Pty) Ltd (“CFTH”) and their black economic empowerment partners led by Isaac Mophatlane, (together “the Consortium”) for a cash consideration of R334 million (“the Base Purchase Price”). The Base Purchase Price, after adjusting for net debt, non-operating assets and working capital, equates to an enterprise value (“EV”) of R410 million implying an EV/normalised EBITDA multiple of 5.3x on Sybrin’s 31 July 2020 (“FY20”) normalised EBITDA of R78 million.

1K1V is a private equity fund backed exclusively by industry-leading families from around the globe while CFTH is an investment holding company that offers investors a blended exposure to technology investments in Fintech. Established in 1991, Sybrin is a market leader in the provision of bespoke solutions to the banking, financial services and insurance sectors as well as central governments. Utilising its proprietary low-code platform, Sybrin specialises in developing, implementing and integrating end-to-end systems and solutions.

EOH CEO Stephen van Coller said “EOH acquired Sybrin in 2013 as it was a great fit with the EOH strategy at the time, which included a stronger vertical focus and the opportunity for African expansion. We are excited for the new opportunities that this disposal brings for Sybrin. The sale of Sybrin is in line with EOH’s stated strategic goals of deleveraging the balance sheet as well as refining the business model. Over the past two years, EOH has been focused on establishing an appropriate capital structure. This transaction allows Sybrin to unlock its full potential and brings EOH a step further towards building the “EOH of the Future” by reorganising the group and strengthening EOH’s capital structure.”

Sybrin CEO Marius Maree said, “Sybrin has benefitted from being part of the EOH journey and is now at a stage where it is well positioned to leverage its proven track record and significantly scale its innovative technology across several geographies and as such is looking forward to starting the next growth chapter with its new partners.”

This transaction represents a significant milestone in EOH’s deleveraging plan and the proceeds of the transaction, net of costs, will primarily be applied to reduce debt with the remainder utilised for working capital requirements.

Concluded van Coller: “We are confident that Sybrin will be enabled to further grow its digital assets
under the new management and wish them the best for their future.”

About EOH

For media enquiries or interviews

Please contact Michael Rubenstein – Aprio
082 903 7797
michael@aprio.co.za

Head of EOH Investor Relations and Group Communications
Zihle Nonganga
zihle.nonganga@eoh.com

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EOH provides comment on ENSafrica’s Steven Powell providing further testimony to the Judicial inquiry into allegations of State Capture (the Commission) and the DHA forensic submission to Parliament on 24 May 2021

Nyeleti.Machovani@iOCO.tech — Wed, 26 May 2021 11:30:26 +0000

This follows an EOH press release on 30 April 2021 where EOH provided clarity on issues pertaining to the Microsoft licence sales (Department of Defence [DoD]), and the City of Johannesburg (the City) contracts, as well as the well-publicised dispute between AYO and certain financial institutions.

Johannesburg, 26 May 2021:

Steven Powell’s testimony at the Commission – 25 May 2021

EOH Group Chief Executive Officer, Stephen van Coller and EOH’s legal counsel, the ENSafrica’s head of the Forensics Department, Steven Powell initially provided testimony to the Commission in November 2020, related to irregular legacy EOH contracts. The ENSafrica investigation initiated in February 2019 at the new EOH Board’s instruction, covered the period from 2015 to Stephen van Coller’s appointment in September 2018. Steven Powell’s recent testimony was a continuation of his initial testimony from November 2020, and a request by the Commission to provide additional information. It was during that testimony on the 25th of May 2021 that Steven Powell provided further clarity on wrong doings that occurred between 2014 and 2019.

The corruption modus operandi
This modus operandi as evidenced by the ENSafrica Forensic investigation has shown that often contracts were bid for and concluded below the value of the cost of delivery of the contract in order to secure the work. It is believed that the intention was for the perpetrators to open a contract account in EOH finance to submit invoices, in order to siphon off money. This was done, in many instances, before any payments had been received for the contract. More frequently than not, the payments made by EOH to sub-contractors for work not done were related to parties who were not even part of the tender process. ENSafrica’s view is that the perpetrators belief was that in the future they could get change orders signed off (work around the procurement requirements) and increase the contract amount to a reasonable level.

This contracting practise has cost EOH significantly as it has concluded the delivery of services under these problematic contract. Furthermore, almost R900m has been stolen from EOH through the siphoning process. The new EOH board and management faced enormous challenges and have had to work extra hard to repay R2bn of the R4bn legacy debt that was racked up due to poor management and looting. As previously reported, EOH has made significant progress and reported its first positive operating profit for the first half the 2021 financial year since the new Board and management took over. In addition, the process to create a permanent capital structure for EOH is well advanced and should be completed in the next 12 months.

As has been disclosed extensively over the past two years, the new EOH management team has proactively engaged and co-operated with all authorities including the Hawks, Financial Intelligence Centre (FIC), National Treasury, SARS and other law enforcement authorities. Furthermore, civil and criminal proceedings by EOH against implicated parties are underway to recover funds from parties who have been unlawfully enriched at the expense of EOH.

Department of Home Affairs ABIS (DHA) agreement awarded in 2015
Following the presentation to parliament on the 24 May 2021 of the Nexia SAB&T report findings into the Department of Home Affairs (DHA) AGSA Forensic Investigation regarding the appointment of EOH Mthombo (Pty) Ltd for the Automated Biometric Identification System (ABIS), EOH wishes to provide clarity on this issue:

Stephen van Coller, EOH Group CEO said,

“The Department of Home Affairs ABIS (DHA) agreement awarded in 2015, was to migrate from the Home Affairs National Information System (HANIS) to an automated biometric information system (ABIS). This was a critical project to consolidate citizens’ data and enable further digtisation of the Department of Home Affairs processes. This contract formed part of the initial problematic legacy contracts as identified in the ENSafrica forensic investigation initiated by the EOH Board in February 2019. At the time of discovery, the new EOH management team reported its concerns regarding the awarding of the contract to the Hawks and the FIC.

As acknowledged in the Nexia SAB&T forensic report, EOH fully cooperated with the investigation on information available to the Group at the time, and importantly EOH further initiated action to recover losses caused by the perpetrators of wrongdoing.”

Background to the contract
The total contract value was c.R410 million. The contract bid was placed at R200m below the other competitors in order to secure the contract, allegedly based on leaked inside information. EOH has only received c.R282 million incl. VAT in payment for services rendered. To date, EOH has successfully delivered 51 of the 60 contracted milestones for phase 1 of the Project, which have been signed off and accepted by the DHA. EOH has further procured and built two data centres as contracted. In addition all contracted interfaces have been built and unit testing has been completed.

The remaining milestones in phase 2 were ceded to a the sub-contractor by EOH on 1 April 2021 following a proposal submitted by EOH to the DHA in March 2020. This has the required legislated approvals. As part of EOH’s commitment to deal with the past appropriately, EOH ensured the cession remains within the original budgeted expense and that the hand over is managed appropriately. This has been at EOH’s own cost. The project was unfortunately delayed for a number of reasons and in order to resolve the disputed issues, this now forms part of an ongoing arbitration process.

Accountability remains paramount
Said Stephen van Coller, EOH Group CEO,

“The EOH independent forensic investigation itself is behind the group, and we have reported suspected fraud and corruption to the authorities and instituted legal proceedings where appropriate. We have also duly engaged the relevant law enforcement agencies to ensure that anyone found guilty of wrongdoing will ultimately be held accountable for their actions.

We remain encouraged by the ongoing support and feedback we have received from all our stakeholders including our clients, our suppliers and our investors. I am especially appreciative of our c.6200 hardworking and honest people who were not part of these legacy issues and who have remained committed to staying the course and building the EOH of the future.”

About EOH
EOH is one of the largest technology services companies in Africa and has a wide range of solutions in Industry Consulting, IT Services, Software, Industrial Technologies and Business Process Outsourcing. The Group continues to be an undisputed market leader in its core ICT businesses which operates principally under the iOCO brand name. The nature of this business is systemic to both the public and private sector and is an integral technology partner for a number of South Africa’s leading JSE-listed, blue-chip companies as well as key metros and government departments. It’s other business, NEXTEC collaborates with world-leading technology providers to design, implement and manage intelligent value-adding infrastructure and people solutions that make a positive and lasting impact. The Group’s c.6200 employees deliver services to over 5000 enterprise customers across all major industries throughout South Africa, Africa, Europe and the Middle East. As a proudly South African business, EOH is committed to sustainable transformation, making a positive, meaningful contribution to society, and is a Level 1 Broad-based Black Economic Empowerment (‘B-BBEE’) contributor.

For media enquiries please contact:

Michael Rubenstein – Aprio
michael@aprio.co.za
082 903 7797

Head of EOH Investor Relations and Group Communications
Zihle Nonganga
zihle.nonganga@eoh.com

The post EOH provides comment on ENSafrica’s Steven Powell providing further testimony to the Judicial inquiry into allegations of State Capture (the Commission) and the DHA forensic submission to Parliament on 24 May 2021 appeared first on EOH.