iOCO co-CEO Rhys Summerton. (Photograph supplied)
JSE-listed technology services group iOCO, formerly known as EOH, increased profit after tax by 39% to R357 million for the year ended 31 July, as improved margins and lower finance costs boosted earnings.
The group’s audited results, released on 13 October, show revenue increased 3% on a constant currency basis to R5.73 billion, from R5.58 billion in the previous financial year.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 21% to R624 million, while EBITDA increased 18% to R610 million. The EBITDA margin improved to 11%, from 9% a year earlier.
Headline earnings per share and earnings per share increased 42% to 57 cents, from 40 cents, while net finance costs declined 32% to R61 million, reflecting lower debt levels and a more favourable interest rate environment.
IT services, the group’s largest segment, recorded revenue growth of 4%.
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Rhys Summerton, group CEO of iOCO, says: “Our turnaround strategy is delivering results. By giving our business units greater responsibility for their performance and being intentional about how we invest in growth, we have improved profitability and cash generated.
“Our focus is now on investing in the right opportunities, growing our market share and expanding through strategic acquisitions to deliver sustainable growth and long-term value for shareholders.”
iOCO is stepping up its focus on acquisitions as it looks to expand its technology services and software capabilities and increase recurring revenue.
During the financial year, the group allocated capital to share repurchases, strengthening its balance sheet and acquisitions.
Towards the end of the year, it concluded two deals: MySky Group of Companies, which specialises in network and IT infrastructure management, and Astraia Technology, which provides cloud-based software for finance, procurement and other core business functions.
The acquisitions expand iOCO’s networking, IT management and business software offerings, which it aims to sell to large enterprise customers.
The group says its acquisition pipeline remains active, with a focus on both founder-led technology businesses seeking to scale and larger acquisition opportunities.
Recurring revenue from ongoing contracts, including managed services, now accounts for more than 60% of group revenue.
iOCO says this provides greater visibility over future cash flows and a more predictable revenue base.
Ashona Kooblall, group CFO of iOCO, says: “Our results are outstanding and give us increased confidence in the future. As we move into our next phase of growth, maintaining strong cash generation and conversion will remain a priority, ensuring we continue to invest in the business, pursue strategic acquisitions and deliver sustainable long-term value for shareholders.
“Recurring revenue, which comes from ongoing contracts and by building out new revenue streams aligned to modern technologies, remains a key strength, providing a more predictable income stream and better visibility over future cash flows.”
iOCO expects EBITDA to reach at least R680 million in the 2027 financial year, up from R610 million in FY2026.
Guidance is subject to current trading conditions and excludes unforeseen economic or market disruptions, says the firm.
Other priorities include improving cash generation and conversion, maintaining recurring revenue above 60% and continuing disciplined capital allocation across organic investment, acquisitions, balance sheet optimisation and shareholder returns.
The board says the momentum built during FY2026 had carried into a positive start to the new financial year.