iOCO (IOC) H2 2026 earnings summary

Executive summary

• FY26 combined cost rationalisation, decentralised accountability and focused capital allocation with higher earnings, stronger cash generation and a strengthened balance sheet.

• All business units were profitable; SBT returned to profitability after three loss-making years.

• Multi-year contract wins totalled R2.1bn, supporting future earnings visibility; strategy includes market-share growth, cross-selling and international expansion.

Financial highlights

• FY26 revenue was R5,733m as reported and R5,753m at constant currency, up 3.0% from R5,583m; adjusted EBITDA rose 21% to R624m from R516m.

• Operating profit rose 14.8% to R483m; profit after tax increased 38.7% to R357m from R258m. EPS and HEPS each rose 42% to 57 cents.

• Gross profit was R1,587m, down 0.8%; gross margin was 28% versus 29% in FY25.

• Net finance costs declined 32% to R61m from R89m; profit before tax rose 27.3% to R423m.

• Cash generated was R585m and closing cash was R417m; FY26 results required no restatements or performance normalisation.

Outlook and guidance

• FY27 adjusted EBITDA guidance is R680m; management expects absolute EBITDA growth, while margins may flatten or soften as investment resumes.

• FY27 free cash flow guidance is R650m, including a R200m working-capital benefit; excluding that benefit, FCF is R450m, or 72 cents per share. FY28 FCF guidance is R500m, or R1 per share at 500m shares.

• Targets include double-digit revenue growth, recurring revenue exceeding 60%, and a 60% increase in recurring revenue.

• Longer-term share-count objective is ~500m from 620m currently; achievement depends on share price and capital allocation needs.