JSE-listed iOCO, previously EOH Holdings, has experienced six consecutive months of profitability – the first such period in three years – following a groupwide cost-cutting initiative that saw the disposal of loss-making entities within the group.
According to iOCO’s interim results for the six months to January 2025, published on Tuesday, gross profit for the period (excluding non-recurring items) increased by 2.8% year on year to R823-million, with gross profit margins growing from 27% to 30%.
“In the first stage of our turnaround plan, we prioritised disciplined cost rationalisation and strategic investments in growth. A thorough review of corporate and head office functions uncovered inefficiencies, which were addressed by streamlining processes to create a nimble and decisive group, all while maintaining robust governance standards,” iOCO chief financial officer Ashona Kooblall said in commentary alongside the results.
“This stage required us to make bold and necessary decisions, including divesting onerous or loss-making operations, to fully concentrate on our core competencies.”
Although group revenue fell by 6.4% year on year to R2.7-billion, Ebitda – earnings before interest, tax, depreciation and amortisation – grew by an impressive 159% to R252-million in the six months to January. iOCO said a stronger revenue base improved the group’s operational efficiency, which led to higher margins across the board.
Operating margin grew to 7.8%, up from 0.3% the previous year. Similarly, Ebitda margin grew from 3.1% in the first half of 2024 to 9.2% in the first half of 2025.
Steadier revenues and improved operational efficiencies gave iOCO the opportunity to use its improved cash flows to chip away at its debt. iOCO’s debt now sits at R613-million compared to R644-million in the previous period. The group paid R39-million in interest and repaid R31-million in capital in the six months to January.
Funded from cash
iOCO reported a significant reduction in the use of its overdraft facility in the period, which was previously utilised to its maximum capacity. Interest paid on the overdraft dropped from R22-million in the 2024 financial year to just R6-million in the first half of 2025.
Read: Big management shake-up at iOCO as co-CEOs appointed
“These repayments were entirely funded by cash generated from operations – a historic milestone for iOCO, as capital repayments were previously reliant on asset disposals. This marks a pivotal moment in establishing sustainable financial practices and bolstering operational resilience,” said Kooblall.
Read: Former Dimension Data boss joins iOCO board
iOCO’s cost rationalisation efforts are part of a broader turnaround strategy that has included a rebranding from EOH to iOCO in December 2024, followed by sweeping management changes at both the executive and board level. These include the appointment of joint CEOs and executive directors Rhys Summerton and Dennis Venter in February. This was followed an announcement in March that former Dimension Data executive Nompumelelo Mokou, will join the iOCO board of directors as chair of its audit and risk committee on 1 May.
The group has reorganised its operations along six strategic pillars, namely: Digital, Infrastructure Services, Connected Industrial Ecosystems, Digital Business Solutions, Outsourced Knowledge Solutions and International.
The digital business is iOCO’s biggest revenue generator by far. Its revenues for the first half of the group’s 2025 financial year amount to R807-million, with a gross profit margin of 30%. The infrastructure services business followed suit with revenue of R475-million, although its gross profit margin was lower at 22.4%.
iOCO’s international division showed the highest gross margins at 38%, although revenues were the second lowest among others in the group at R272-million. The international business has operations beyond sub-Saharan Africa, attracting new customers in Europe and the Middle East.
“The group has identified expansion opportunities, centred on a six-pillar strategy, including boosting sales capabilities and re-establishing end-user relationships. iOCO’s progress reflects resilience, determination and strategic execution. We have made significant strides in resetting the company, driving growth and creating value for stakeholders,” said Kooblall. – © 2025 NewsCentral Media
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