iOCO (IOC) H1 2026 earnings summary

Executive summary

• Achieved strong interim results for HY2026, with all business units profitable, robust revenue growth, and market share gains 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 annualized net cost savings.

• Strong cash generation and renewed focus on capital allocation, including share buybacks and the first acquisition in eight years.

• International expansion and new business wins contributed to improved financial performance.

Financial highlights

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

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

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

• Operating margin reached 9%; gross profit margin at 28% despite infrastructure cost increases.

• Operating cash flow of R294 million; closing cash balance at R379 million.

Outlook and guidance

• Raised FY26 EBITDA guidance to above R610 million, up from previous R580–600 million.

• Recurring revenue expected to remain above 60%; free cash flow per share targeted at 60 cents.

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

• Double-digit annual free cash flow per share growth anticipated.

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