Avior Capital Markets - EOH Holdings Ltd. (10JC) EOH | Standing, but forced into a corner

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Avior Capital Markets

Ruhan du Plessis

EOH | Standing, but forced into a corner

EOH's FY'19 earnings included R3.2bn of once-off costs to accurately represent the state of the balance sheet and businesses, following the previous management team's inappropriate business practises. Current management highlights R3.7bn of suspicious acquisitions and transactions between FY'13 and FY'17, which required R3.4bn of debt and generated no cashflow for the Group. We do not believe the existing businesses can service the debt due to further requirements to manage and close-out non-profitable businesses and projects in Nextec.

22/10/2019 9 EN

Underlying

EOH Holdings Ltd.

EOH Holdings is engaged in the provision of business and technology services. Co. develops business and information technology strategies, supplies and implements services and manages enterprise-wide business systems and processes for medium to larger clients. Co. operates within three segments: Infrastructure, which is engage in the sale of infrastructure products; software, which includes new software sales and maintenance; and services, which is engaged in the provision of services including consulting, systems implementation and integration and managed services. Co. operates in South Africa, Africa and the U.K.

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ZAE000071072 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Ruhan du Plessis

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