{"id":812947,"date":"2025-02-21T13:00:00","date_gmt":"2025-02-21T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=812947"},"modified":"2025-02-21T14:07:05","modified_gmt":"2025-02-21T12:07:05","slug":"south-african-tech-company-shooting-the-lights-out","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/it-services\/812947\/south-african-tech-company-shooting-the-lights-out\/","title":{"rendered":"South African tech company shooting the lights out"},"content":{"rendered":"\n

IOCO, formerly known as EOH, has seen strong share price performance over the last year, indicating optimism about a successful turnaround.<\/p>\n\n\n\n

Between 2016 and 2024, EOH shareholders had a torrid time, with the share price plummeting by 99%, destroying tremendous shareholder value.<\/p>\n\n\n\n

In December 2016, the EOH share price traded at R105.50, and the ICT company was a must-own in most investment portfolios.<\/p>\n\n\n\n

However, corruption and rising debt raised concerns about EOH, which has been growing revenue through acquisitions.<\/p>\n\n\n\n

Stephen van Coller was parachuted into the EOH chief executive position with a mandate to create value by growing EOH and creating jobs.<\/p>\n\n\n\n

However, he said what he discovered after taking the job was so concerning that he changed direction and focused on rooting out corruption and reducing debt.<\/p>\n\n\n\n

When he took the reins, the company had R16.3 billion in revenue, a net profit of R288 million, equity of R8.1 billion, and 11,500 employees.<\/p>\n\n\n\n

He sold numerous EOH businesses, launched a capital raise to reduce debt, and slashed costs by cutting staff and, in some cases, reducing salaries.<\/p>\n\n\n\n

When he left in March 2024, EOH was a much smaller company. Revenue declined to R6 billion and it recorded a loss of R54 million for the year.<\/p>\n\n\n\n

The company’s number of employees plummeted from 11,500 in 2018 to 4,600 in 2024, which shows the impact of changes at the company.<\/p>\n\n\n\n

In early 2024, the EOH share price hit a low of R1.05 per share as investors lost trust in the company\u2019s turnaround promises.<\/p>\n\n\n\n

However, things started to change in May 2024 after big changes to the EOH board and management were announced.<\/p>\n\n\n\n

Marius de la Rey was appointed interim chief executive, and Veronica Motloutsi, Dennis Venter, and Rhys Summerton were appointed directors.<\/p>\n\n\n\n

The market loved these changes, and the EOH share price rallied. Between April 2024 and February 2025, the share price increased by 186%.<\/p>\n\n\n\n

Towards the end of 2024, EOH changed its name to IOCO, signaling a break from the company that had caused shareholders so much pain.<\/p>\n\n\n\n

IOCO trading statement<\/strong><\/h2>\n\n\n\n
\"\"<\/a>
Marius de la Rey<\/figcaption><\/figure>\n\n\n\n

On 13 February 2025, IOCO released a trading statement for the interim period that ended on 31 January 2025. It was exactly what the market wanted to hear.<\/p>\n\n\n\n

IOCO achieved a 220% to 240% increase in its profit per share, translating to a net profit of roughly R115 million to R134 million.<\/p>\n\n\n\n

This represents a significant performance improvement, considering it was stripped of its most valuable assets.<\/p>\n\n\n\n

Despite the strong performance reported in the trading statement under his leadership, IOCO revealed that De la Rey resigned as interim CEO and executive director.<\/p>\n\n\n\n

He was replaced by executive directors Rhys Summerton and Dennis Venter, who now act as joint CEOs of the IOCO group.<\/p>\n\n\n\n

The new appointment of joint CEOs may signal managerial conflicts and uncertainty of leadership. It may also prohibit decisive decision-making.<\/p>\n\n\n\n

The group also released a statement regarding the new structure of IOCO and the management changes.<\/p>\n\n\n\n

IOCO will be split into five business divisions, each independently led, with its own division CEO and set of KPIs. Therefore, it would no longer require a traditional CEO.<\/p>\n\n\n\n

Summerton and Venter will focus on improving revenue growth, talent allocation and capital allocation.<\/p>\n\n\n\n

A positive signal to investors is that Summerton and Venter will not receive a cash salary. They will be rewarded purely for IOCO\u2019s share price performance.<\/p>\n\n\n\n

This perfectly aligns the CEO’s interests with that of shareholders. What makes this even better is that Summerton paid for his shareholding with his own money.<\/p>\n\n\n\n

Since November 2024, Rhys Summerton purchased 6.7 million IOCO shares for R11.2 million. The average price Summerton paid per share was R1.67.<\/p>\n\n\n\n

Already, his R11.2 million investment has grown to R21.1 million due to the recent rise in the IOCO share price.<\/p>\n\n\n\n

As of the 2024 annual report, Summerton held 1.46% of IOCOs outstanding shares directly and 2.6% indirectly.<\/p>\n\n\n\n

Venter\u2019s shareholding has not been disclosed, and it is unknown what his shareholding is and how he obtained it.<\/p>\n\n\n\n

While being directors of IOCO already in 2024, Summerton and Venter were the only two directors who did not accept their director’s fees.<\/p>\n\n\n\n

Having the chief executives\u2019 interests and incentives directly aligned with those of shareholders is a positive sign.<\/p>\n\n\n\n

The market had an overwhelmingly positive reaction to the trading statement and the announcement of the new CEO structure.<\/p>\n\n\n\n

Since the announcement last week, the share price jumped by 25%. This shows the trust investors have in the new board and management team.<\/p>\n\n\n\n

New IOCO management structure<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

IOCO, formerly known as EOH, has seen strong share price performance over the last year, indicating optimism about a successful turnaround.<\/p>\n","protected":false},"author":10,"featured_media":812957,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[21787,1957,14402,21785,21786,21784],"class_list":["post-812947","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-it-services","tag-dennis-venter","tag-eoh","tag-ioco","tag-marius-de-la-rey","tag-rhys-summerton","tag-stephen-van-coller"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=812947"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812947\/revisions"}],"predecessor-version":[{"id":812956,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812947\/revisions\/812956"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/812957"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=812947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=812947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=812947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}