The IT services group iOCO, formerly known as EOH Holdings, forecasts that its net profit after tax for the fiscal year ending July 31, 2026, will be between 348 and 360 million Rands, representing an increase of 35–40% compared to the 258 million Rands reported in FY2025. The company also expects earnings per share and basic earnings per share to be 55–60 cents.
When publishing interim results in March, iOCO officially raised its EBITDA forecast to 'above 610 million Rands,' increasing the previous range of 580 to 600 million Rands set in October based on FY2025 results. However, Tuesday's announcement sets the EBITDA figure at a range of 595 to 616 million Rands, with only the upper end of this range exceeding the forecast the company set six months ago.
The claim that results 'exceed expectations' is more justified when using the second metric—adjusted EBITDA, which is projected to be between 610 and 636 million Rands. The statement does not specify which items were excluded during the adjustment, but the comparative FY2025 figure for both metrics is 513 million Rands, meaning the adjustments are specific to FY2026 and amount to 15 to 20 million Rands.
iOCO reported a net profit of 180 million Rands for the first six months up to January 31, which is 46% higher than the 123 million Rands, with revenue of 2.83 billion Rands—the first organic revenue growth in several years. Based on the full-year range forecast, the second half of the year is expected to bring in 168 to 180 million Rands, which in the best case would be comparable to the first six months. Basic earnings per share of 28 cents in the interim implies 27–32 cents in the second half of the year, and first-half EBITDA of 305 million Rands suggests a range of 290 to 311 million Rands.
Comparative figures
Even when compared to the second half of FY2025, rather than the first half of FY2026, there is still growth—TechCentral estimates this at 24–33% on the profit line—but this growth is less than the 46% achieved by the group in the interim period. These comparative figures are part of the explanation: the turning point began to show in the numbers during FY2025, so iOCO is now outpacing periods that were improving on their own.
The contribution of MySky Group is also factored into the second half of the year. iOCO signed a binding network deal agreement worth 52 million Rands on March 12, which was its first acquisition in eight years, and any profit from this deal will fall in the second half, not the first. A second deal concerning ERP specialist Astraia Technologies was signed on July 16, two weeks before the end of the financial year.
Revenue is not disclosed in the trading statement, so it is unclear what portion of the profit improvement is related to cost and margin management versus revenue growth. Management attributes this to its three-pronged strategy, which includes cost rationalization, decentralization, and disciplined allocation of capital and resources. The figures have not yet been audited or presented by iOCO auditors.
Cash is another metric to watch when the audited results are published, which iOCO expects on October 14. The March management statement indicated free cash flow of at least 60 cents per share and recurring revenue above 60%. CEO Rhys Summerton set a medium-term target he called '500 divided by 500'—500 million Rands in free cash flow against 500 million shares, compared to approximately 620.9 million issued in March. The group consistently buys back shares to close this gap, including during closed periods, which boosts earnings per share regardless of market performance.
Stock Price
On Tuesday, iOCO traded at 3.97 Rands, which is 6.37% lower than last year and 5.48% lower than last month. Shares have risen by 148.1% over three years, but this increase was achieved at the beginning of the recovery period; over the last year, they have moved sideways or declined while profits grew. Currently, the shares trade below the average price of 4.14 Rands per share that iOCO paid for repurchased shares before March.