Adapt IT Holdings has reported a decline in revenue of 2% to R707-million (2019: R721-million) for the six months ended 31 December 2020.
The company states that the decline on the prior comparative period is due to ongoing challenging and weaker trading conditions particularly in South Africa, which remains Adapt IT’s primary market, constituting 73% of total revenue.
“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 states in its SENS announcement. “The prior comparative period was not affected by Covid-19.”
However, annuity revenue remains healthy and an improved ratio on the previous reporting period to 66% (2019: 60%).
Earnings before interest, tax, depreciation and amortization (EBITDA) declined by 1% to R128-million (2019: R129-million). EBITDA included an increase in bonus provision of R16-million.
EBITDA margin was maintained at 18% as cost containment remained a focus through operational efficiency projects, particularly in divisions most impacted by Covid-19.
Cash generated from operations increased to R124-million (2019: R74-million) representing an improved cash conversion ratio of 1,55-times (2019: 0,94 times). Cash and cash equivalents was R142-million (2019: R73-million) at the end of the period.
Earnings per share (EPS) increased by 37% to 20,06 cents (2019: 14,64 cents). Headline earnings per share (HEPS) increased by 44% to 20,69 cents (2019: 14,40 cents), and normalised HEPS increased by 16% to 32,00 cents (2019: 27,70 cents).
Interest expense on borrowings decreased by 30% to R18-million (2019: R25-million), with capital repayments of R57-million made during the six month period to 31 December 2020.
Net interest bearing borrowings decreased by R140-million to R324-million (2019: R464 million) and the net gearing ratio at 31 December 2020 was 42% (2019: 69%).