EOH lost more than a fifth of its value on Wednesday — continuing a precipitous decline that started in late 2016 — after the technology group said earnings for the six months ended January could fall by almost a third. The stock closed 21% lower at R59.50. EOH’s shares have lost more than 60% of their value since the start of 2017, partly due to allegations of procurement irregularities levelled against a subsidiary and forced share sales by directors. This followed years of strong growth, which was partly fuelled by acquisitions that were funded with shares. “The [trading update] was really poor because they weren’t quick enough to cut the cost base,” said Wayne McCurrie, fund manager at Ashburton Investments. “They reassure us that the second six months will be significantly better because they’ve addressed the costs, so we’ll have to wait and see.” McCurrie said Ashburton would “ride out the tough times” and would not sell its EOH shares. The stock was also now relatively cheap....
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