Adapt IT delivers above ICT sector average annual results

• Revenue increased 36% to R306 million (2012: R224,8 million)
• Operating profit increased 32% to R29.4 million (2012: R22,2 million) 
• Earnings per share up 27% to 22,25 cents (2012: 17.46 cents)
• Headline earnings per share up 28% to 22,27 cents (2012: 17.45 cents)
• Social Responsibility: Opening of the first Adapt IT Knowledge Centre and
• Skills Development: A 209% increase in the investment in skills development

JSE listed Adapt IT, today announced its annual results for the year ended 30 June 2013. Revenue for the year increased by 36% to R306 million, with annuity revenue representing a healthy 40% of total turnover. Operating profit grew by 32% to R29,4 million, maintaining the operating margin at 10%. Basic earnings per share grew by 27%, while headline earnings per share grew by 28% on the prior year, substantially above the average of the ICT sector.

Adapt IT is an innovative information technology (IT) services and specialised solutions provider, delivering IT solutions to some of the most successful Education, Manufacturing and Financial Services organisations in 20 countries worldwide.

Sbu Shabalala, CEO of Adapt IT says: “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. As of 1 July 2013 we are better positioned to enhance operational efficiencies through an amalgamation of the Company’s subsidiaries into the main operating subsidiary. This enables us to do business under one Adapt IT brand and contributes to improving our value proposition and service to customers.”

Other achievements in the review period include: increasing the Education sector’s market penetration into the African market; improving the Manufacturing segment’s operational efficiency; and introducing SAP® and Cloud Services (Powered by SAP®) through the Swicon360 (Pty) Ltd acquisition in October 2012.

Adapt IT’s Social Responsibility initiatives included the opening of the first Adapt IT Knowledge Centre at Zwakele Primary School in Amaoti, the largest informal settlement in KwaZulu-Natal, providing 1400 school children access to learning in a digital environment. Another highlight for 2013 was the investment of over R2 million in skills development, which represents a 209% increase from the previous year. Skills development forms an integral part of Adapt IT’s overall strategy and values to encourage and drive a high performance culture.

The key objectives of the company’s growth strategy for the year ahead are to:

• Consolidate the sector focus in Education, Manufacturing and Financial services. During 2013, 44% of Adapt IT’s revenue was derived from the Manufacturing sector, 40% from Education and 16% from Financial services.
• Improve regional presence in South Africa and grow in the local market. Most of the company’s revenue (77%) was generated in South Africa.
• Extend the company’s presence in the rest of the African markets. African countries generated 19% of the Group’s revenue in 2013.
• Leverage technology vendor partnerships and extend the IT service offering for our customers.

Further to this, Adapt IT continues to seek strategic acquisitions of successful complementary businesses, with long term “blue chip” customers to improve market presence.

Shabalala says Adapt IT continues to enjoy the benefits of a strong financial position, a recurring revenue model and low capital expenditure, all of which position the company for long-term success. “We are committed to enhancing stakeholder value.”

“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,” says 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,” concludes Shabalala.