Adapt IT has reported that its revenue for the year ended 30 June 2013 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 information technology (IT) services and specialised solutions provider, delivering IT solutions to education, manufacturing and financial services organisations in 20 countries.
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 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 1 400 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.
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; and
* Leverage technology vendor partnerships and extend the IT service offering for customers.
In addition, 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 IT. This improvement will definitely filter through in the next year to the African markets within which we operate,” he adds.
“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.”