JSE-listed technology services provider iOCO has reported a 3.5% year-on-year increase in revenue to R2.83-billion and a 46% year-on-year increase in net profit to R180-million for the six months to January 31.

The solid results come as the company, which traded as EOH until December 2024, continues its turnaround strategy.

The increase in revenue represents the first period of organic growth in several years, the company points out.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) for the interim period rose by 21% to R305-million, while operating profit increased by 12% to R240-million.

Headline earnings a share increased to 28c, supported by improved margins and lower finance costs.

The operating margin increased to 9% and the Ebitda margin increased to 11%. Net finance costs decreased by 35% year-on-year to R32-million.

Further, net interest-bearing bank debt decreased to R512-million, with R60-million repaid through operating cash flow.

Net asset value increased by 20% during the six months under review, supported by balance sheet optimisation and reduced liabilities.

The company's IT Services division delivered 3.3% revenue growth, driven by hardware, software, cloud, managed services and digital transformation projects.

Its international operations reported revenue growth across cloud and platform services, with strong contributions from the Middle East and Switzerland.

The group’s strengthened financial position enables it to pursue targeted growth opportunities, says iOCO CFO Ashona Kooblall.

“We have built a stronger business with a clear purpose, a strong culture of innovation with impact and exceptional teams. iOCO is strongly positioned to invest in growth initiatives that expand our capabilities and strengthen our market position and we look forward to continuing this momentum into the future,” she says.

“The results reflect continued progress in executing the group's turnaround strategy. We have improved profitability, embedded a decentralised model to empower business unit leaders to deliver their growth targets and focused on disciplined capital allocation,” adds iOCO CEO Rhys Summerton.

“This foundation positions iOCO to expand market share and deliver sustainable growth,” he says.

During the period under review, iOCO continued implementing its three-step turnaround strategy focused on cost rationalisation, decentralisation and disciplined capital allocation.

With the first two phases largely complete, the business is now increasingly focused on capital allocation and growth.

Additionally, iOCO executed a share buyback plan during the six-month period and repurchased 6.4-million shares to the value of R27-million.

Further, iOCO expects to continue building on the momentum achieved in the first half of the year and has revised its guidance upward.

“With a stronger operating platform, a clear roadmap and a competitive market position, we are confident in delivering sustainable growth and long-term value,” Summerton says.

ACQUISITION
iOCO has signed a binding agreement to acquire 100% of the MySky Group of companies, which provides enterprise networking and managed infrastructure services.

The acquisition forms part of iOCO’s strategy to expand its infrastructure, connectivity and managed services capabilities, while growing recurring revenue.

The transaction includes an initial R52-million consideration, with additional contingent earn-out payments over a period, subject to the business achieving agreed performance targets.

The acquisition is expected to broaden iOCO’s enterprise client base, strengthen its connectivity and infrastructure capabilities and add recurring revenue to the group.

Founded in South Africa, MySky has built a strong reputation for delivering enterprise connectivity and infrastructure solutions to businesses across the country.

“Being part of a diverse company such as iOCO allows us to scale further while continuing to deliver high-quality services to our customers,” say MySky CEO Dylan Horsten and CTO Dean Horsten, who are also the founders of the company.