Adapt IT Delivers Stellar Results
2016-07-15
Adapt IT Delivers Stellar Results
JSE-listed Adapt IT, a provider of specialised software solutions and services to the Education, Manufacturing, Energy and Financial Services sectors, has announced its interim results for the six months ended 31 December 2015. “We have been consistent in pursuing diversification through an organic and acquisitive growth strategy which has contributed to this positive set of results for Adapt IT,†says Adapt IT CEO, Sbu Shabalala.
Adapt IT reported a turnover increase of 19 per cent to R310 million for thehalf-year, organic and acquisitive growth contributing 13 per cent and 6 per cent respectively. Operating profit increased 50 per cent to R53 million through further synergies being maximised across the Adapt IT businesses. Interim headlineearnings per share increased in line by 42 per cent.
Adapt IT acquired 100 per cent of CQS Investment Holdings Pty Ltd (“CQSâ€) effective1 July 2015. This acquisition was subject to the approval of the CompetitionCommission, which was granted in December 2015. Therefore CQS has beenconsolidated with effect from 31 December 2015 and has no contribution toprofits in the interim results. The CQS purchase price of R216,8 million wasfunded through a combination of debt of R160 million and the issue of 7million Adapt IT shares.
CQS is a leading provider of niche audit, financial and risk managementsoftware services and solutions to financial professionals, corporates andthe public sector in South Africa and the rest of Africa. CQS has over 20years’ experience in providing international best-of-breed and unique nicheservice and solutions, ranging from practice management software tofinancial reporting, risk and compliance management and data analysis. CQSis a software-as-a-service (SaaS) solutions business, and will bolster thefinancial services segment of Adapt IT. “We are excited to have the CQS teamjoin the Adapt IT Group of like-minded people with a passion for deliveringhigh value software solutions to our clients†said Shabalala.
Black Economic Transformation remains a strategic imperative for the groupas demonstrated by the achievement of a B-BBEE (Broad-Based Black EconomicEmpowerment) Level 2 certification by our South African operating entity.Adapt IT intends to enhance its black ownership status further throughfunding arrangements for future acquisitive growth.
Adapt IT’s is well diversified across the four major sectors in which itoperates, improving resilience to adverse economic cycles as are currentlybeing experienced in the manufacturing and the oil industries. Thegeographic diversification has resulted in South Africa representing 72 per cent of turnover, with 10 per cent from other African countries and 18 per cent from globalcustomers. Adapt IT’s strong annuity income provides long-termsustainability.
“Despite the challenging market conditions, our outlook remains positive aswe continue to build on the strong well-diversified foundation, to create asizeable leading ICT business that delivers above ICT sector average growthand returns.†concludes Shabalala.
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