Our opinion on the current state of IOCO(IOC)Previously called Enterprise Outsourcing Holdings (EOH), Ioco was Africa's largest information technology company with involvement in almost every aspect of computer applications. At one point, the company had 11,000 staff members, but that has now been reduced to 6,151.
It was, until August 2015, the darling of the JSE because it had a long track record of steadily improving profits. It made a peak of R178 per share at a P:E of 35. An unsuccessful attempt to exceed that high (i.e., a double top) came a year later in September 2016, and since then, the share has fallen steadily to reach a low of 146c in February 2023.
This fall was initially accompanied by allegations that the company was involved in and owed its success to state capture in collaboration with the Guptas. The CEO and founder, Asher Bohbot, resigned in May 2017 and handed over to Zunaid Mayet, who later handed over to Stephen van Coller. Usually, when a company is run by a strong charismatic leader and that leader (like Bohbot) resigns, it is time to sell the share.
The company's 200 subsidiaries have been consolidated into three divisions with centralized debt collection and procurement.
On 6th July 2021, *Business Day* reported that EOH could possibly be "blacklisted" by the government as a result of its past tender frauds. This would obviously be very negative for the company.
On 11th November 2022, the company announced a R500m rights issue and a R100m private placement, mainly to reduce debt. On 13th February 2023, it announced that the offer had been 135.8% oversubscribed.
In its results for the year to 31st July 2024, the company reported revenue down 3.1% and a headline loss per share of 0.21c compared with a loss of 21c in the previous year.
The company said, "A special board subcommittee was formed in June 2024 to turn EOH around. Key initiatives include business restructure and rationalization plans. Corporate and administration cost restructure successfully completed. Cost savings of between R160 million and R200 million anticipated into FY25."
In a trading statement for the six months to 31st January 2025, the company estimated that HEPS would increase to between 19c and 21c compared with a loss of 11c in the previous period.
On 31st May 2024, the company announced the resignation of various directors and the appointment of Marius de la Rey as interim CEO.
Technically, the share made a "double bottom" in April and May of 2024, after which it began a new upward trend. We believe that it will continue to rise.
On 14th February 2025, the company announced that Marius de la Rey had resigned with immediate effect. Directors Rhys Summerton and Dennis Venter have been appointed as joint CEOs and executive directors.
