Adapt IT, the JSE-listed technology group that is pursuing diversification through an organic and acquisitive growth strategy, continues to deliver stellar financial performance. By Gugu Lourie
The technology firm informed investors on Monday that headline earnings per share – South Africa’s main profit gauge – rose 42% to 23.96 cents a share for the six months to end 31 December 2015.
The Durban-based firm that has been benefiting from its diversification strategy reported that its operating profit jumped 50% to R53 million and turnover was up 19% to R310 million.
“We have been consistent in pursuing diversification through an organic and acquisitive growth strategy which has contributed to this positive set of results for Adapt IT,” says Adapt IT CEO, Sbu Shabalala.
The software and computer services firm has managed to deliver positive growth in a challenging market that has seen the voluntary delisting of a bigger rival Gijima, which was struggling and trying to resuscitate its growth through a turnaround strategy. On 14 August 2015 the market also saw the disappearance of technology firm Business Connexion (BCX) after it was bought for R2.7bn by Telkom and delisted from the exchange.
Adapt IT is confident of delivering consistent growth in its earnings despite the challenging market conditions.
Shabalala explains: “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.”
The firm is also banking on CQS, a provider of niche audit, financial and risk management software services, that was acquired for R216,8 million.
Adapt IT believes that CQS, which is a software-as-a-service (SaaS) solutions business, will bolster the financial services segment of the company.
“We are excited to have the CQS team join the Adapt IT Group of like-minded people with a passion for delivering high value software solutions to our clients” said Shabalala.
With over 20 years in business and approximately 4 000 clients, CQS Investments is a value added distributor of a combination of its own- and third party- (being CaseWare, ACL and Confirmations.com) Intellectual Property software solutions for audit, data analytics, controls monitoring, risk management and financial reporting to financial professionals, corporates and the public sector.
Adapt IT has been a hugely successful software and computer services stock listed on the JSE and it continues to make money in the highly competitive technology market.
Those who invested in Adapt IT five years ago are now benefiting from the rising share price.
Adapt IT, which is valued at close to R2 billion, has seen its share price rise more than 1, 900 in the past five years and 29% in the past 90 days.
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