{"id":474178,"date":"2021-03-09T08:47:52","date_gmt":"2021-03-09T06:47:52","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=474178"},"modified":"2021-03-09T08:47:52","modified_gmt":"2021-03-09T06:47:52","slug":"adapt-it-underlines-south-africa-challenges-in-muted-earnings","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/enterprise\/474178\/adapt-it-underlines-south-africa-challenges-in-muted-earnings\/","title":{"rendered":"Adapt IT underlines South Africa challenges in muted earnings"},"content":{"rendered":"

Adapt IT on Tuesday (9 March) reported a 2% drop in revenue for the six months ended December 2020, to R707 million, due to ongoing challenging and weaker trading conditions particularly in South Africa – which remains the group’s primary market, constituting 73% of total revenue.<\/p>\n

Profit from operations, however, improved by a percent, to R79.83 million.<\/p>\n

“The Covid-19 global pandemic caused repeated shutdowns or slowdowns in certain of our client segments resulting in project volume decline and delays, with project based revenue suffering longer lead times,” it said.<\/p>\n

Earnings before interest, tax, depreciation and amortisation (EBITDA) was R128 million, marginally down from R129 million in 2019.<\/p>\n

The impacts on earnings in the current period included an increase in bonus provision of R16 million, a negative foreign exchange movement of R10 million, and an increase in the allowance for expected credit losses of R7 million resulting from client segments most impacted by Covid-19, it said.<\/p>\n

Headline earnings per share (HEPS) increased by 44% to 20.69 cents from 14.40 cents and normalised HEPS increased by 16% to 32 cents from 27.70 cents.<\/p>\n

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Adapt IT provides specialised software and digitally-led business solutions\u00a0 predominantly in the education, manufacturing, financial services, energy, communications and hospitality industries.<\/p>\n

The education division delivered revenue growth of 15% compared to the prior comparative period. This was driven primarily through increased demand for eLearning solutions, the group said. This division contributed 19% to total revenue and delivered EBITDA margin of 18%.<\/p>\n

The manufacturing division experienced a 7% decrease in revenue due to project volume declines and delays, however delivered an EBITDA margin of 16%, Adapt IT said. The manufacturing division contributed 17% to total revenue.<\/p>\n

Financial services achieved revenue growth of 8%, contributing 20% to total revenue and delivered a 20% EBITDA margin (2019: 18%).<\/p>\n

The energy division experienced a 32% decrease in revenue as a result of the drop in project revenue, contributing 5% to total revenue, Adapt IT said. EBITDA margin was 1% (2019: 12%) with further operational efficiency projects currently underway.<\/p>\n

The communications division grew 3%, achieving an EBITDA margin of 25% (2019: 31%) and contributing 21% to total revenue.<\/p>\n

Adapt IT pointed out that its hospitality division was significantly impacted by the measures implemented by government in this industry to respond to Covid-19, with revenue down by 14%.<\/p>\n

EBITDA margin improved considerably to 14% (2019: 9%) with the acceleration of the operational efficiency projects to respond to Covid-19. The hospitality division contributed 18% of total revenue.<\/p>\n

Looking ahead, the group said that the South African economy has been hard hit by the Covid-19 pandemic and the associated regulations. The impact on Adapt IT\u2019s segments is mixed, with some presenting new opportunities, such as the increased drive to eLearning, amongst others.<\/p>\n

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\n

Read: Adapt IT sees improved earnings<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Adapt IT on Tuesday (9 March) reported a 2% drop in revenue for the six months ended December 2020, to R707 million, due to ongoing challenging and weaker trading conditions particularly in South Africa – which remains the group’s primary market, constituting 73% of total revenue.<\/p>\n","protected":false},"author":10,"featured_media":376381,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13700],"tags":[3899,26],"class_list":["post-474178","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enterprise","tag-adapt-it","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/474178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=474178"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/474178\/revisions"}],"predecessor-version":[{"id":474200,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/474178\/revisions\/474200"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/376381"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=474178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=474178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=474178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}