Winning the game of people

2014-09-21 15:00

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CEO’s maxim of choosing the right people to work for him and the right partners to work with have been a formula for growth, writes Mamello Masote

A well-placed slogan greets you as you step into the offices of IT company EOH. It reads: “Systems make it possible, people make it happen”.

This, according to EOH chief executive Asher Bohbot, is the basic philosophy of his company and the reason it has grown 44% a year over the past 16 years. This year has been no different for EOH and this week, in its annual results for the year to July, there was a 42% increase in revenue to R7.2?billion while headline earnings were 32% higher at 446.6c a share.

“There were [many] elements that influenced our growth, but the most important thing is the acknowledgement that the game of business is the game of people,” said Bohbot at the EOH offices in Bedfordview, east of Joburg.

EOH is located far from the hustle and bustle of Sandton, which many JSE-listed companies call home.

“The one thing you must attend to are the people, the other dimension is subservience to people,” said Bohbot.

EOH, which is involved in consulting, technology and outsourcing, listed on the JSE in August 1998 at R3 a share. By the end of that year, the share had slumped to R1.80. But this has since changed and the share price recently broke the R100 barrier.

Bohbot attributed the company’s growth to choosing the right people to work at EOH, as well as the right partners.

The right kind of acquisitions have also been a key part of EOH’s growth. Its 2011 acquisition of TSS Managed Services, for example, boosted its end-user support, server and network management, and security management. But a few analysts have expressed doubts about EOH’s ability to maintain its pace of growth.

Bohbot said about half of the company’s revenue was from organic growth; the rest was from strategic acquisitions that would facilitate further growth.

Another EOH acquisition was financial services software developer Sybrin Systems, bought in August last year for about R300?million.

Sybrin is a specialised developer of software products for the financial services industry. Not only will this strengthen EOH’s financial services capabilities, but will support its expansion into Africa.

Sybrin has offices in about 17 countries in Africa, the Middle East and Europe. This will increase EOH’s footprint to about 29 African countries. “We are taking Africa more seriously, to be less opportunistic and more pragmatic through relationships and partnerships,” said Bohbot.

“We’ve bought quite a lot of businesses in Africa?– small ones to just give us a little insight into what’s happening.

“All our offerings are relevant to Africa such as technology, industrial technology, infrastructure design, water systems, energy systems and local government processing systems”.

Philipp Wörz, a portfolio manager at PSG Asset Management, said: “EOH has long-term contracts that provide the company with annuity income. At EOH, contracts are widespread and there is no big contract that accounts for a significant portion of its revenue.

“I think its largest client makes up about 3% of revenue, which limits client-specific risk.”

The biggest single shareholder in EOH is global asset management company Fidelity and EOH is part of its low-priced stock fund. The Government Employees Pension Fund is also a big shareholder.

About 20% of EOH’s revenue comes from government work, an area Bohbot said the company would like to expand, especially because government will need greater use of technology to improve service delivery.

“A lot of people say it’s a risky business: the [delayed] payments, ethics, delays?–?all of it is true, but you have to manage the risks. Our view is that it’s a business opportunity.”

Wörz agreed that while government work could be risky, it could have great rewards if done properly.

“Getting paid isn’t an issue if you have the right systems in place. On the positive side, the better the government works, the better the private sector will work,” he said.


EOH put 620 people through its learnership and internship programme last year. This year, it employed 450 of them and took another 600 into the programme

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