JSE-listed technology services firm iOCO, formerly known as EOH, has reported significant progress with its turnaround strategy.
Late yesterday afternoon, the company published its interim financial results for the six months ended 31 January (HY2025), “marking a significant milestone in its turnaround strategy”.
According to the company, it has delivered its first profitable interim period in three years, driven by disciplined execution, strategic cost management and a streamlined operating structure, which is yielding clear benefits.
Despite a 6.4% revenue decline, iOCO notes it achieved a 159.3% increase in earnings before interest, taxes, depreciation and amortisation (EBITDA).
Headline earnings per share increased to 19 cents, compared to an 11 cent loss per share in HY2024. Gross margins improved to 30%, reflecting operational efficiencies and a focus on higher-value services.
Co-CEO Rhys Summerton comments: “These results demonstrate the tangible impact of our strategic reset. We have stabilised the business, improved our financial position, and are well-positioned for sustainable growth. Onerous or loss-making businesses have been eliminated, with a renewed focus on core competencies.”
iOCO reports that group revenue (excluding non-recurring sold entities) of R2.7 billion for the six months ended 31 January 2025 was 6.4% lower compared to R2.9 billion for the six months ended 31 January 2024.
Total cash generated from operations was R302 million, up from R201 million in HY2024.
The firm adds that all profit margins have shown healthy increases, with gross margin up from 27% in HY2024 to 30% in HY2025, operating margin up from 0.3% to 7.8% and EBITDA margin up from 3.1% to 9.2%.
“This demonstrates strong efficiency and productivity management by the iOCO team,” says Summerton.
The company points out that following the successful completion of its restructuring, iOCO has transitioned to a decentralised operating model with five core business units, each focused on key market growth areas.
This has improved operational efficiency and positioned it for more substantial market share expansion, it adds.
In October last year, Ashona Kooblall, executive director and group chief financial officer of iOCO, told ITWeb that the firm reduced its head office from a R12 billion to R6 billion business. She noted the trimming of the head office is part of the restructuring efforts, as it looked to rebrand from EOH to iOCO.
The name change came after the JSE-listed IT services group had been on the mend since a 2019 ENSafrica investigation into the then EOH’s dealings revealed governance failings and wrongdoing.
The probe found about R1.2 billion worth of suspicious transactions at EOH, which mostly involved transactions within public sector contracts.
Commenting on the latest results, Kooblall says: “This period marks a turning point for iOCO. We have taken decisive action to drive efficiencies, focus on value creation and improve cash flow.
“The results are clear: six consecutive months of profitability and a solid foundation for long-term value creation, as we continue to focus on growth initiatives, strategic investments and working capital management to maintain momentum.”
On operational highlights, iOCO says the Connected Industrial Ecosystems business’s revenue grew by 3.5%, driven by strong demand for operational technology and industrial software.
It says software revenue increased 15%, contributing to a 54% improvement in EBITDA, adding that the international business showed resilient performance despite external economic pressures, with ongoing expansion efforts.
Outsourced Knowledge Solutions’ EBITDA significantly improved due to operational efficiencies and targeted sales investments.
Looking ahead, iOCO says it is focused on organic growth, strategic acquisitions and expanding into high-growth markets, including SME-managed services, cyber security advisory and public sector enterprise resource planning solutions.
Summerton concludes: “Our turnaround strategy is delivering real results, and we are now entering a phase of focused execution. iOCO is well-positioned to deliver value for our shareholders, customers and employees.”
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