IOCO joint CEORhys Summerton.
Image: Supplied
JSE-listed technology group iOCO increased taxed profit by 46% to R180 million in the six months to December 31, as the company continued its turnaround strategy.
Alongside the improved financial performance, iOCO also signed an agreement to acquire the MySky Group of Companies, a provider of enterprise networking and managed infrastructure services, for R52m initially, with additional contingent earn-out payments over a period.
The good financial news sent the group share price rising a strong 4.53% to R4.39 on Wednesday, at a time when the JSE All Share Index was down by 1.04%.
The acquisition is part of a strategy to expand infrastructure, connectivity, and managed services capabilities while growing recurring revenue, the company said in a statement.
Group revenue for the six months increased by 3.5% to R2.83 billion, representing the first period of organic growth in several years.
Earnings before interest tax depreciation and amortisation (EBITDA) was higher by 21% to R305m, with operating profit up by 12% to R240m. Headline earnings per share increased by 47.4% to 28 cents, supported by improved margins and lower finance costs.
Net finance costs fell by 35% to R32m. CEO, Rhys Summerton said that the results reflect ongoing progress in executing the turnaround strategy.
“Our strategy is delivering. We have improved profitability, embedded a decentralised model to empower business unit leaders to deliver their growth targets, and focused on disciplined capital allocation. This foundation positions iOCO to expand market share and deliver sustainable growth,” said Summerton.
The group continued implementing its three-step turnaround strategy in the first half, which is focused on cost rationalisation, decentralisation, and disciplined capital allocation.
With the first two phases largely complete, the business was now increasingly focused on capital allocation and growth.
iOCO repurchased 6.4 million shares to the value of R27m. Net interest-bearing bank debt decreased to R512m, with R60m repaid through operating cash flow.
Segmentally, IT Services delivered 3.3% revenue growth, driven by hardware, software, cloud, managed services, and digital transformation projects. International operations reported revenue growth across cloud and platform services, with strong contributions from the Middle East and Switzerland.
iOCO's CFO, Ashona Kooblall, said their strengthened financial position enabled them to pursue targeted growth opportunities.
“We have built a stronger business with clear purpose, a strong culture of innovation with impact, and exceptional teams. iOCO is strongly positioned to invest in growth initiatives that expand our capabilities and strengthen our market position,” said Kooblall.
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