JSE-listed technology services firm EOH has reduced its head office from a R12 billion to R6 billion business.
So said Ashona Kooblall, executive director and group chief financial officer (CFO) of EOH, last week in an interview with ITWeb after the company released its financial results for the year ended 31 July.
She noted the trimming of the head office is part of the restructuring efforts, as it also looks to rebrand to iOCO.
EOH recently advised that it intends to recommend that shareholders at the upcoming AGM approve a proposal to change the company’s name to iOCO.
It believes the proposed name change aligns with its strategic objectives and branding initiatives.
iOCO is a subsidiary of EOH, which is mainly involved in systems integration and digital transformation solutions.
EOH appointed Kooblall as executive director and group CFO, with effect from 22 July. She replaced Marialet Greeff, who resigned from the company in June.
Moving forward
“We understand that our head office was built for a R12 billon group, but we are now R6 billion. So, we have to restructure and reorganise ourselves, while still meeting high levels of governance. I am very excited and very busy all for the right reasons,” Kooblall said.
On the proposed name change to iOCO, she noted: “We want to put the legacy issues behind us. The EOH and iOCO of today are really relevant businesses for the technology industry in South Africa.
“While the past focused specifically on legal matters, turnaround and corruption that happened some five to six years ago, we are now in a position of true business performance and unlocking potential.
“When I came in, the special board subcommittee had been formed to turn around EOH and we have been quite intense in terms of the hard decisions that we have to make and the changes we have to make to turn around EOH.
“We want to become morecustomer-centric, reduce inefficient structures and complexities in the group.”
In its financial results, EOH said total group revenue was R6 billion, down 3.1% (FY2023: R6.23 billion from continuing operations).
“Our total revenue was down but that included sold businesses. So, it’s not necessarily like-for-like, as those sold businesses would have only had revenue until the date of sale. On a like-for-like basis, including the sold businesses, our revenue was largely flat at 0.3% down.”
She added that from a revenue growth perspective, the digital business has grown in terms of revenue, which is at R1.8 billion.
“We are also seeing huge growth in the international business and infrastructure services. There is lots of demand for solutions and services there. We are also seeing a lot of demand in technology skills in South Africa. Our skills are servicing countries, such as the UK, and we are looking to take iOCO internationally.
“The company is also witnessing huge growth in the Middle East, in countries such as Saudi Arabia. We are looking at increasing investments there in order to unlock value.”
She noted EOH has seen a slowdown in the mining and metals industry, which has impacted its operational technology business. However, EOH is seeing an uptick in that area in the second half of the year.
Core values
“In terms of restructuring the business, we have already done a lot in regards to the anticipated savings going into 2025. We are looking at cost savings of between R160 million to R200 million.
“This includes a significant restructure because our head office was built for a much bigger company, and to become fit-for-purpose and reduce complexity, we had to move away from inefficient structures.
“We want to create a good environment for our customers to feel free to further partner with us. iOCO is a brand that we have been quite close to over many years, built from an employee and customer perspective.”
She pointed out that EOH has reduced its debt to R640 million and there are no plans to offload other businesses.
“EOH was made up of lots of businesses. This meant we did not have a lot of synergies in terms of giving a full solution to a customer. We want to consolidate that to one iOCO, to create synergies and take the whole solution to the customer.
“At the moment, all our businesses are now core to us and we don’t see the need for disposing of any of our assets. We want to create value in the group and trade strongly with the businesses that we currently have.”
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