JSE-listed software provider, Adapt IT, announced its interim results on Thursday showing a 46% turnover increase for the six months ended 31 December 2017.
Adapt IT provides software solutions to the education, manufacturing, financial services, energy and hospitality sectors. It has over 1,000 employees and 10,000 customers in 40 countries in Africa and the rest of the world.
Turnover increased to R674 million for the half-year, organic growth from continuing operations being 17% and acquisitive growth contributing 35%.
- EBITDA up 29% to R116 million (2016: R90 million)
- HEPS up 22% to 29.70 cents (2016: 24.41 cents)
- Normalised HEPS up 11% to 38.73 cents (2016: 34.74 cents)
“The consistent pursuit of both our organic and acquisitive growth strategy has contributed to excellent turnover growth in the interim reporting period,” said Adapt IT CEO, Sbu Shabalala. He added that “an improved sales capability and uptick in market sentiment contributed to the organic growth”.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 29% to R116 million, while profit before interest and tax (PBIT) grew 24% to R86 million. Profit attributable to equity shareholders grew 34% while the weighted average number of shares in issue grew 10% over the prior period.
The acquisitive growth contribution of 35% comprised mainly of the Micros South Africa hospitality group acquisition, which was consolidated with effect from 1 July 2017, the group said.
Micros SA is a provider of solutions for the hospitality industry, providing software solutions to more than 4,200 customer sites in 18 countries. Its services support business critical processes for hotel management and food and beverage management.
Adapt IT said it initiated a share buyback programme to take advantage of the ADI share recently being undervalued. Since 30 June 2017, Adapt IT reduced the number of issued shares by 5.6 million shares, or 3.5% of the issued shares, at a weighted average price of 759 cents per share, utilising cash of R43 million.
“The outlook is positive as Adapt IT continues to build a software business that enables both our employees and our customers to achieve more. We have built a strong well-diversified foundation needed to create a sizeable leading software business that delivers above sector average growth and returns in line with our 2020 revenue target of R3bn,” said Shabalala.