Adapt IT profit soars, eyes telecoms

JSE-listed ICT company Adapt IT is eyeing a play in the telecoms space after it reported a 32% rise in operating profit to R29.4 million in its annual results for the year ended 30 June 2013.

On Monday (19 August), the group recorded a 36% lift in revenue to R306 million, with headline earnings per share up 28% to 22.27 cents, from 17.45 cents in 2012.

Adapt IT declared a cash dividend of 5.56 cents.

Shares in Adapt IT have advanced 163.6% over the past year to R3.11, giving the group a market cap of R345.21 million.

Adapt IT said that skills development rose 209% over the reporting period.

The group has 313 employees throughout SA, providing a range of specialised IT solutions and services to customers in manufacturing; education; and financial services across SA, the rest of Africa, Australasia, USA and Europe.

Sbu Shabalala, CEO of Adapt IT said: “Under challenging market conditions, Adapt IT has delivered another strong financial performance in 2013 through the continued implementation of a sustainable growth and diversification strategy.

The group said it increased the education sector’s market penetration into the African market; while also introducing SAP and Cloud Services through its Swicon360 acquisition in October 2012.

Shabalala told BusinessTech that the group would target the telecoms space, noting that the unbundling in the sector has meant that the last mile has become a “potentially lucrative” area.

He said that, through its foray into cloud services, Adapt IT would look to partner with  service provides.

Sbu Shabalala
Sbu Shabalala

During 2013, 44% of Adapt IT’s revenue was derived from the manufacturing sector, 40% from education and 16% from financial services. Shabalala said the group sees big potential in the financial services market in South Africa.

The group said its key objectives for the year ahead include the improvement of its regional presence in South Africa and grow in the local market. Most of the company’s revenue (77%) was generated in South Africa.

It will also aim to extend it’s presence in the rest of the African markets. African countries generated 19% of the group’s revenue in 2013.

“Business in developing markets is improving for all sectors and the expectation is that more companies will reinvest in Information Technology. This improvement will definitely filter through in the next year to the African markets within which we operate,” said Shabalala.

“During 2013, we have significantly improved our service and product portfolio and are strategically positioned to grow business in differentiated sectors, markets and geographies. Adapt IT therefore continues to be a compelling investment for shareholders,” he said.

More on Adapt IT

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Adapt IT makes R10.4m cash acquisition

Adapt IT FY revenue up 24%

Adapt IT expects earnings rise

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Adapt IT profit soars, eyes telecoms