Johannesburg - JSE-listed Adapt IT yesterday posted a 58 percent increase in operating profit to R136.4 million, up from R86.5m reported in 2015 for the year to end June as its diversification strategy and acquisitions bolstered its bottom line.
The company also reported a 36 percent growth in headline earnings per share for the year to 57.54 cents per share in 2015. Revenue climbed 38 percent to R803.3m, from R578m a year ago, while profit came in at R81m from R52.7m previously.
The company declared a gross dividend of 13.4c per share, up 23 percent.
Pleased with results
Sibusiso Shabalala, the chief executive, said: “We are pleased with the results, considering that South Africa is projected to grow by 0 percent by the International Monetary Fund this year. We decided to look beyond South Africa to grow our market and this has paid off and now the company provides software to 22 countries in Africa.”
Adapt IT is an innovative information technology services and specialised solutions provider, delivering IT solutions to some of the most successful manufacturing, financial services, education and energy organisations in more than 38 countries worldwide.
“We reach R800m worth of sales in South Africa and this equals to 73 percent of our sales while the rest is exported to other countries,” added Shabalala.
The bulk of revenue growth, however, came from acquisitions.
Organic growth year-on-year was 9 percent, while growth attributable to acquisitions came in at 29 percent. Operating profit margin expanded from 15 percent to 17 percent, with good performance from all business segments.
The company has been busy on the acquisitions front as well as it obtained control of CQS effective from December 2015 in a deal worth R216.8m. This was in line with its growth strategy.
CQS is a value-added distributor of a combination of its own and third party intellectual property software solutions. CQS has about 4 000 clients. From the date of acquisition, CQS had contributed R32.94m to the profit of the group after tax.
Acquisitions
In January 2016, the group acquired Multimatics, a company specialising in business intelligence solutions relating to telecoms. A smaller offshore company, Meta Office, in New Zealand was acquired in January as well.
The company has made huge strides in the last 8 years with the share price moving from 68c at the end of 2011 to the current levels of R12.50 per share.
“We want to make our presence felt in the international markets and we are in countries like New Zealand, Australia and Mauritius. Our diversification strategy has worked well over the years,” Shabalala said.
Adapt IT shares gained 1.26 percent on the JSE yesterday to reach R12.86 per share.
BUSINESS REPORT