In an uncommonly high level of commitment to the company’s future, iOCO has picked activist investors Rhys Summerton and Dennis Venter as its co-CEOs in the latest leadership shake-up since shareholders took charge of the company’s performance.
Venter and Summerton, who are forgoing their salaries, replace Marius de la Rey, who took the reins temporarily after the activist investors stepped in and reconstituted the board less than a year ago out of frustration caused by the once high-flying tech group’s stock market and operational underperformance.
The company, once known as EOH, flagged a nearly fourfold jump in half-year profit, sending its share price leaping more than 10% in afternoon trade on Thursday. The stock closed 10.6% higher at R2.82, a level last seen nearly three years ago.
De la Rey’s exit is almost immediate as Venter and Summerton ascend to the C-suite effective Friday. Both collectively own a 25% stake in iOCO, which has struggled to emerge from the shadows of underhand dealings with private sector clients as a stable business, even after the board drafted in Stephen van Coller, who left the CEO position last year when shareholders intervened.
It is a rare to see activist shareholders stepping into drivers’ seats to run SA companies, as they prefer to remain in the shadows, pulling strings and pushing for change from their boardroom chairs.
The decision has the potential to lift investor confidence as the leaders’ wallets are now directly tied to the company’s fortunes and aligning with the corporate governance activists’ calls for executives to have more skin in the game.
The more we uncovered at EOH, the more we discovered that EOH was actually a swan that needed to be set free from the shackles that held it back
— Dennis Venter
co-CEOs
Their compensation will be linked entirely to the company’s share price, iOCO said in a statement. Since their board debut in May 2024, they have set up a turnaround committee, with Summerton directly focused on driving capital allocation and group strategy while Venter focuses on boosting the top line. They will work closely with CFO Ashona Kooblall, alongside the company’s existing management team.
Speaking exclusively to Business Day, Venter said he decided to become an activist shareholder and join the board in May last year to gain a better understanding of the company’s financial health, which he thought needed attention with share price down.
“From the outset, it was evident that management and shareholder values were misaligned in that the share price decline hardly affected any of the management. The more we uncovered at EOH, the more we discovered that EOH was actually a swan that needed to be set free from the shackles that held it back,” Venter said.
“Rhys and I have jointly embarked on this journey of ‘making the iOCO share price great again’. Our skill sets are very different but complementary. To put our money where our mouth is we have refused to take a monthly salary, and will only be remunerated by a significant increase in the share.”
EOH’s share price plunged almost 90% in the past five years, far underperforming the JSE all-share index, the broadest measure of JSE performance, which picked up 37% in that time. Operationally, the company has shown flickers of hope, returning to profitability on an operational level, but it struggled to grow revenue, which shrank by more than 10%.
Disillusioned with erosion of value at this once-thriving tech firm, shareholders initiated a plan aimed at revitalising it. The strategy includes expanding the iOCO and international unit, cutting unnecessary costs and changing leadership if they have to. That strategy appears to be bearing some fruit.
The group said it expects to report earnings per share of18c-21c, an improvement of 220%-240% from the loss per share of 15c in the previous comparable period.
Headline earnings per share, which strip out the effect of one-off financial events, is expected to be 19c-21c, 270%-290%higher than the headline loss of 11c per share previously.
“As we move forward, we are energised to lead the charge in bringing state-of-the-art technologies to Africa, solidifying our reputation as one of the region’s foremost technology innovators,” chair Jabu Moleketi said.
“With the remarkable depth and expertise of our leadership team, we are ready to build on this momentum, creating lasting value for our stakeholders and empowering our employees to reach new heights.”
The company expects to release its half-year results on April 2.
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