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Six-month extension will see Van Coller exit EOH board only in March

EOH CEO Stephen van Coller

EOH CEO Stephen van Coller

18th October 2023

By: Schalk Burger

Creamer Media Senior Deputy Editor

     

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JSE-listed information and communications technology services company EOH has announced that CEO Stephen Van Coller has agreed to extend his five-year contract by another six months to March 31, 2024, at which time he will retire from the board.

The successful rights offer completed in February has given the board the freedom to consider the next chapter for EOH and Van Coller has asked for his contract not to be considered for renewal beyond the six-month extension, the company said in an October 18 update to shareholders.

Van Coller was appointed as CEO of EOH on September 3, 2018, shortly before the corruption scandals and contracting irregularities within certain businesses were exposed.

"Over the past five years, Stephen has successfully led the EOH Group through a complete restructure and turnaround with a focus on saving jobs, deleveraging the balance sheet and the implementation of world class governance systems. During the past financial year, EOH has been able to focus on growth and now operates as a normal company with the majority of its legacy issues having been resolved.

"The board expresses its gratitude to Stephen for his invaluable contribution to the sustainability of the company and wishes him well for his next chapter," the company said.

Van Coller would remain available to the board after March 31, 2024, should his assistance be required to ensure a smooth leadership transition and to complete any outstanding projects that require his involvement.

Further, the board has appointed Marialet Greeff as an executive director and interim CFO with effect from November 1. She will succeed Megan Pydigadu who resigned as CFO with effect from October 31.

Greeff is currently the EOH Treasury, Tax and Regulatory Finance group executive and is a South African Institute of Chartered Accountants registered chartered accountant.

She has played an integral role in the finance function and the restructuring and turnaround process of the EOH group since joining the company in 2019, EOH stated.

"The roles and key performances measures of the CEO and CFO positions have changed considerably, as EOH has resolved the various legacy issues, restructured the business and moved into a growth phase. EOH has also significantly decentralised its head office.

"In light of this and the change in strategic focus, the board is undertaking a thorough skills assessment as part of the recruitment of a new CEO and CFO. Further announcements will be communicated in due course," EOH noted.

Further, shareholders are also advised that, as part of the head office restructure, Fatima Newman has changed roles from chief risk officer to EasyHQ group executive, with effect from August 1, 2023.

Newman will remain an executive director of the board and be responsible for the EasyHQ business, which provides head office solutions for EOH's clients. EasyHQ solutions include governance, risk, compliance, recruitment, training and human resources management, attestations, and digital signature solutions, among others.

"To ensure business continuity, the EOH board has secured commitment and tenure for four-year periods with each of the heads of the group's respective operational businesses, namely Marius de la Rey, Brian Harding and Fatima Newman."

FINANCIAL RESULTS
Meanwhile, in its financial year ended July 31, EOH generated an operating profit from continuing operations of R135-million, an increase of 35% over the operating profit from continuing operations of R100-million during the 2022 financial year.

Revenue from continuing operations increased by 3.3% to R6.2-billion during the year, up from R6.03-billion in the prior financial year.

Adjusted earnings before interest, taxes, depreciation and amortisation from continuing operations declined by 11.5% to R322-million from R364-million in the 2022 financial year.

Further, the company recorded an improvement of 68% in loss a share from continuing operations to 20c for the financial year, down from the 62c loss a share posted for the prior financial year.

Similarly, it recorded a 58% improvement in headline loss a share from continuing operations to 19c, from a 45c headline loss a share in the 2022 financial year.

The company's operating profit margin from continuing operations improved to 2.2% for the 2023 financial year, up from 1.7% in the preceding year.

EOH also had a net cash balance of R204-million at year-end, with unused direct short-term facilities of R218-million.

"With the completion of the rights issue during February 2023, the group further concluded financing agreements with Standard Bank to refinance the remaining debt from March 31, 2023. This has created more certainty around the capital structure and near-term liquidity," the company said.

Additionally, EOH repaid R678-million of debt during the financial year, R555-million from net capital raise proceeds and the balance of R123-million from disposal proceeds, mainly from the sale of the Network Solutions business and Hymax South Africa, and had net interest-bearing bank loans of R683-million at year-end, excluding the used bank overdraft facility of R32-million.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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