Adapt IT earnings flat in challenging SA economic environment

Listed ICT group Adapt IT on Tuesday reported a marginal decline in revenue for the six months ended December 2018, to R669.35 million, from R678 million in the prior year, due to a depressed economic environment in South Africa.

Turnover declined to R667.2 million, from R676.2 million, while profit from operations was up a fraction, to R86.3 million, from R86.2 million before.

Headline earnings per share for the six months to December 2018 grew 1% to 29.89 cents from 29.70 cents, and normalised HEPS grew 5% to 40.81 cents, it said.

Adapt IT’s South African offices are in Johannesburg, Durban and Cape Town, and international offices in Mauritius, Botswana, Ireland, Kenya, Australia and New Zealand.

The group provides software solutions to the education, manufacturing, energy, financial services, communications and hospitality sectors, employing over 1,000 technology professionals.

Adapt IT’s turnover contribution:

  • Education – 14%
  • Energy – 10%
  • Financial Services – 22%
  • Hospitality – 23%
  • Manufacturing – 31%

Turnover from continuing operations for the six months ended December 2018 increased by 4% to R667 million, Adapt IT said.

“There was no organic growth from continuing operations due to the challenging economic environment persisting in the South African market, particularly low project turnover in the Energy and Hospitality sectors.”

Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations increased by 10% to R118 million representing an improvement in EBITDA margin to 18%, it said.

On 9 January 2019, Adapt IT announced that it has entered into agreements to acquire the Wisenet Group –  a provider of cloud-based SaaS Learning Relationship Management platforms to vocational training institutions in Australia.

Looking ahead, Adapt IT said it continues to pursue a diversified growth strategy aimed at creating a global specialised software business, through a combination of organic growth and strategic acquisitions.

“Despite the current market conditions, our medium and longer-term outlook is optimistic as we continue to build upon the strong foundation we have established to create a sizeable, scalable, leading ICT business,” it said.

Read: Adapt IT acquires Australia firm Wisenet

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Adapt IT earnings flat in challenging SA economic environment