iOCO (IOC) H2 2024 earnings summary

Executive summary

• Achieved significant turnaround with improved financial stability, closing out major legacy issues and rationalizing the business for growth.

• Restructured operations and cost base, achieving R160–R200 million in cost savings with benefits expected to flow into FY25.

• Operations stabilized, legacy issues largely resolved, and financial complexity reduced.

• Secured Top Employer certification for 2024, emphasizing retention of scarce skills.

• Investment for future growth has resumed, with a focus on talent and efficiency.

Financial highlights

• Revenue reached ZAR 6.035 billion, down 3.6% year-over-year; revenue excluding legacy entities nearly flat at -0.3%.

• Gross profit ZAR 1.65 billion with a 27.3% margin, slightly down from 27.9% in FY23.

• Adjusted EBITDA at ZAR 307 million, down 1.4% year-over-year; EBITDA margin stable at 5%.

• Net finance costs reduced by 28% to ZAR 118 million, aided by debt reduction and refinancing.

• Headline loss per share improved 99% to ZAR 0.21; loss after tax was ZAR 54 million.

Outlook and guidance

• Healthy pipelines and positive outlook for FY 2025, especially in cloud, managed services, AI, and cybersecurity.

• Positioned for growth with improved economic conditions, higher business confidence, and no load shedding.

• Cost savings of ZAR 160–200 million expected in FY 2025 from restructuring.

• Further debt reduction and selective acquisitions planned once leverage is lower.

• Strategic focus on liquidity, cost optimization, sales productivity, and growth.