iOCO (IOC) H1 2025 earnings summary

Executive summary

• EBITDA increased by 159.3% to ZAR 252 million in H1 2025, marking a significant turnaround and restoration of profitability, despite a 6.4% revenue decline.

• Gross profit rose by 2.8% to ZAR 823 million, with gross margin improving from 27% to 30% due to better contract execution and margin management.

• Headline earnings per share swung from a loss of ZAR 0.11 to a profit of ZAR 0.19, and profit after tax reached ZAR 123 million, the first profitable period in three years.

• New leadership and a 3-stage strategic recovery plan were implemented, including cost rationalisation, decentralisation, and capital/resource allocation.

• Full transition to the iOCO brand, including JSE listing and rebranding from EOH Holdings, completed in 2024/2025.

Financial highlights

• Revenue declined 6.4% year-over-year to ZAR 2.7 billion, mainly due to lower hardware sales, lost contracts, and reduced public sector contribution.

• Operating profit rose to ZAR 213.8 million from a loss of ZAR 49.5 million year-over-year, and operating expenses were reduced by 26.5%.

• Net finance costs fell from ZAR 59 million to ZAR 48 million, and net asset value increased from ZAR 499 million to ZAR 617 million.

• Free cash flow from operations increased to ZAR 302 million, supporting substantial debt reduction and improved liquidity.

• EPS and HEPS both increased by 200% year-over-year.

Outlook and guidance

• FY2025 is expected to be the revenue trough, with growth anticipated from FY2026, focusing on organic growth, market expansion, and targeted acquisitions.

• Targeting net bank debt to EBITDA ratio of 1:1 by year-end 2025 and double-digit free cash flow per share growth.

• Leadership remains committed to the turnaround strategy and capital structure improvement.

• Investor day scheduled for 14 October 2025.

• Public sector opportunities expected to boost second-half revenue.