Asher Bohbot. Picture: SUNDAY TIMES
Asher Bohbot. Picture: SUNDAY TIMES

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  • JSE-listed companies: EOH

TECHNOLOGY firm EOH is on track to generate 25%-30% of its revenues outside SA in the next three years, after recent acquisitions in new markets.

The company is growing its footprint on the continent and gained entry to the Middle East last year through acquisitions. This resulted in the group opening an office in Dubai.

The group generates 87% of its revenues from SA, with the rest of the continent accounting for 9%, and the rest of the world 4%, its interim results showed on Wednesday.

CEO Asher Bohbot said the group expected growth from outside SA to accelerate on recent acquisitions.

"We expect growth outside SA to be accelerated even more than in SA. We are coming from a lower base (in some markets)," he said.

In December, EOH announced the acquisition of six companies in Morocco, Turkey, Iran and Mozambique.

"We have set up a whole division (in Dubai) and will continue to follow our strategy of looking for small acquisitions and joint ventures," Mr Bohbot said.

"EOH remains a very diverse company, with a wide range of product and service offerings, and a large number of diverse enterprise customers.

"EOH is a pan-African company and will continue to grow its business in the rest of Africa and in the Middle East. This growth is expected to accelerate by increasing our in-country presence, forming joint ventures and partnerships, and acquiring new businesses," he said.

In the past two years, it had made a number of acquisitions that helped it expand its footprint in the rest of Africa.

During the six months to January, revenue increased 30%, to R6bn. Profit after tax was up 36% to R462m.

Kaplan Equity Analysts MD Irnest Kaplan said while the company had performed "very well", growth was starting to slow "a little bit".

"The company is becoming so big now that its own success is making it difficult to grow at the same pace," he said.

EOH had to expand because there was a limited amount of growth potential for it in SA, Mr Kaplan said.

EOH is involved in the development of software applications and also manages the information and technology infrastructure of companies, among other services.

EOH attributed the performance to a combination of strong organic growth and recent acquisitions.

EOH’s growth came from all segments, with the strongest from software sales.

EOH has developed, owns, and is acquiring industry-specific niche software applications. It sells its own niche software to users across the globe and intends to intensify its efforts in this sector, using its new foothold in Dubai.

"These applications are owned, run, and managed by EOH and are targeted at those customers and industries where off-the-shelf applications only partially address their needs," Mr Bohbot said.

The depreciation of the rand would also boost the company’s software sales.

Mr Bohbot said SA had become a cheap country as a result of the weaker rand. The company had received inquiries from international firms wanting to outsource some of their technical-support functions to the country, he said.

The depreciation of the rand could boost the business process outsourcing industry, which is best known for call centres.

The services group recorded R4.3bn in revenue, up from R3.3bn. The outsourcing business grew revenue to R1.9bn from R1.5bn, while the software division almost doubled its revenue to R851m.