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Adapt IT reaps rewards for looking outside sluggish SA

Johannesburg - Local information technology solutions company Adapt IT [JSE:ADI] has posted positive earnings for the six months ended December 2016 along with R460m in turnover, up from R310m in 2015 during the same period. 

Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 43% to R89m, from R62m in 2015 during the same period. Meanwhile, operating profit for the period was up 31% from R53m in 2015 to R69m.

Normalised Headline Earnings Per Share (HEPS) was up 20% to 34.56 cents from 28.89 cents in 2015.

Growth for the company, in the period under review, stemmed from the recent acquisition of financial software services firm CQS Technology Holdings for R217m, which contributed to 44% of the company’s total 48% growth.

CQS provides software services and solutions for audit, data analytics, controls monitoring risk management and financial reporting to over 4 000 customers in 30 countries.

READ: Adapt IT in R217m acquisition deal

Adapt IT CEO Sbu Shabalala said that the environment in South Africa, for a long time, has not been conducive to high growth. 

“We had to go outside of South Africa for the growth of the company,” he told Fin24.

“We are taking South African intellectual property that we build here and sell it offshore as well as using best of breed technologies from some of our partners offshore and adapt it to the local African market. This is where our success lies,” he added.

In December 2016, Adapt IT utilised the general authority granted by its shareholders at an annual general meeting to issue shares for cash, raising R84m of fresh equity in support of its acquisitive growth strategy. 

These funds have been temporarily offset against borrowings until they are applied in due course.

“Despite the challenging market conditions, our outlook remains positive as we continue to build on the strong, well-diversified foundation, to create a sizeable, leading ICT business that delivers above ICT sector average growth and returns,” Shabalala said.

The Johannesburg Stock Exchange (JSE) listed company has over 800 employees and customers in 40 countries in Africa, Asia, Australasia, Europe, South America and North America.

The company provides IT solutions to the education, mining and manufacturing, energy, telecommunications and financial services sectors.

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