iOCO (IOC) H1 2026 earnings summary

Executive summary

• Achieved strong first-half 2026 results with all business units profitable, revenue up 3.5% to R2.83 billion, and market share growth for the first time in years.

• Implemented a three-stage strategy: cost rationalization, decentralized operating model, and focused capital/resource allocation since July 2024, delivering R350 million in net cost savings.

• Strong cash generation enabled share buybacks and the first acquisition in eight years, strengthening networking and managed services capabilities.

• Sustained trading momentum, new business wins, and successful international expansion drove financial improvement.

• Repurchased over 9.3 million shares, reducing issued shares and strengthening the balance sheet.

Financial highlights

• Revenue grew 3.5% year-over-year to R2.8 billion, with IT services up 3.3%, operational technology up 1.3%, and international up 9.2%.

• EBITDA increased 21% year-over-year to R305 million, with EBITDA margin at 11% and operating margin at 9%.

• Profit after tax rose 46% to R180 million; EPS and HEPS up 47.4% to 28 cents per share.

• Operating cash flow of R294 million enabled investment, debt reduction, and share buybacks; closing cash balance at R379 million.

• Net interest-bearing debt reduced by 58% from FY 2023, now at R512 million.

Outlook and guidance

• EBITDA guidance for 2026 revised upward to above R610 million, with recurring revenue expected to remain above 60%.

• Free cash flow per share targeted at 60 cents, aiming for R400 million+ free cash flow at group level.

• Long-term goal to reach R500 million free cash flow and reduce shares in issue to 500 million, targeting R1 per share.

• Confident in second-half EBITDA delivery and continued double-digit free cash flow per share growth.

• Focus remains on expanding recurring revenue, strategic acquisitions, and market reach.