Adapt IT lifted by acquisition strategy

JSE listed Adapt IT Group on Monday (11 February) reported a 52% increase in revenue to R140.1 million in interim results for the period ended December 2012, citing the success of its diversification and acquisitive growth strategy.

Operating profit improved to R11.6 million, up by 60% from R7.2 million before.

Headline earnings per share increased 35% from 6.19 cents to 8.35 cents with profit before tax increasing by 54% to R14.2 million.

The group operates in the following sectors, education, which contributes 41%, mining and manufacturing which accounts for 43%, and financial services at 16% of the revenue.

Acquisitive growth

Adapt IT Group CEO, Sbu Shabalala attributed the success of the group to its focus on a combination of organic and acquisitive growth.

In October, the group acquired outsourcing service provider, Swicon360, in a deal worth R11.7 million, which AdaptIT  said added R10 million in turnover to the reporting period.

“The integration is progressing as planned, with Swicon360 providing additional depth and expertise in SAP technology and solutions to the Adapt IT Group,” he said.

“The acquisition is extending value-added services to our existing customer base in the mining and manufacturing industries and has greatly aided to remove barriers of entry into new sectors, while strengthening our presence in Gauteng,”  Shabalala said.

The CEO told BusinessTech that the company would continue to pursue its diversification and acquisitive growth strategy. “You can always assume that we are talking to more than one (company) at any given time,” he said.

Africa calling

The Adapt IT Group, with 314 permanent employees and 64 contractors throughout South Africa, also has two regional offices in the United Kingdom and New Zealand.  The majority of the group’s customers are based in Africa, Europe, the USA and Australia.

According to Shabalala, Adapt IT aims to develop its African footprint  “more aggressively” in the coming period, targeting the SADEC region, and East Africa, including Kenya, Tanzania and Rwanda.  He added that Uganda was also on the company’s radar.

Looking ahead

“We anticipate a successful second half of the year,” said Shabalala.

“The economic and trading environment is improving both in South Africa and globally. Adapt IT is better positioned to take advantage of future software and services opportunities due to our increased service diversity and sector reach.”

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Adapt IT lifted by acquisition strategy