iOCO lifts profit 39% as it steps up acquisition-led growth
Revenue rose 3% on a constant currency basis to R5.73bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased 18% to R610m. The group’s EBITDA margin improved to 11%, from 9% a year earlier.
Adjusted EBITDA, which excludes certain items, rose 21% to R624m. Headline earnings per share increased 42% to 57 cents.
Net finance costs fell 32% to R61m, which iOCO attributed to lower debt levels and a more favourable interest rate environment. Revenue in IT Services, the group’s largest segment, increased 4%.
Acquisitions support expansion
iOCO is shifting its focus towards acquisition-led growth after completing two acquisitions towards the end of the financial year.
The group acquired MySky Group of Companies, which specialises in network and IT infrastructure management, and Astraia Technology, a provider of cloud-based software for finance, procurement and other core business functions.
The acquisitions expand iOCO’s networking, IT management and business software capabilities, with the aim of broadening its offering to large enterprise customers and growing recurring revenue.
More than 60% of group revenue now comes from recurring sources, including ongoing managed services contracts. iOCO says this provides greater visibility over future cash flows.
The group said its acquisition pipeline remains active, with a focus on smaller, founder-led technology businesses that could scale on its platform, as well as larger acquisition opportunities.
During the year, iOCO also allocated capital to share repurchases and strengthening its balance sheet.
“Our turnaround strategy is delivering results,” said group chief executive Rhys Summerton. He said the group would focus on investing in growth opportunities, increasing market share and pursuing strategic acquisitions.
EBITDA forecast to rise further
iOCO expects EBITDA to reach at least R680m in the 2027 financial year, about 11.5% above the R610m reported for FY2026, subject to current trading conditions and no unforeseen economic or market disruptions.
Other priorities include improving cash generation and conversion, keeping recurring revenue above 60% and balancing investment in the business with acquisitions, balance sheet management and shareholder returns.
Group chief financial officer Ashona Kooblall said cash generation and conversion would remain a priority as the company pursued its next phase of growth.
The board said the momentum built during FY2026 had carried into a positive start to the 2027 financial year.
