Adapt IT is looking into several possible share placements that will boost its black ownership from the current 30% to 50%, although it has not set a timeframe for the equity changes.
The listed company yesterday reported its results for the year to June and said headline earnings per share leapt 55.1%, while revenue gained 33.9% to R408.5 million, and its bottom line grew from R26 million to R38.9 million.
CEO Sbu Shabalala notes the group's growth has exceeded ICT industry averages. "This has not only attracted additional institutional following, but increased shareholder confidence in Adapt IT and its development strategy."
Slow journey
Shabalala, who attributes the group's growth to its geographical and product diversity, says the company has received interest from potential equity partners, and there is no reason why share placements cannot be undertaken to boost ownership to 50%.
There are several empowerment firms that have cash to invest to expand their portfolios to include IT, notes Shabalala, who owned 15% of the company as of last June. He says the group is taking its time in selecting equity partners to "do it right".
Adapt IT would use the cash inflow to acquire additional companies as it continues to seek to grow through acquisitions, and to own software intellectual property, says Shabalala. "We always have some irons in the fire."
Shabalala points out that acquisitions accounted for 17% of its top line improvement, down from the 26% reported at half year, but expected to improve to 25% next year. He adds the group has negligible gearing and can boost debt to 50% of its balance sheet value.
Adapt IT, which has four operating segments in education, manufacturing, energy and financial services, ended the year with cash and cash equivalents of R15 million. During the year, it bought the Aquilon group of companies, which now forms part of the Adapt IT Energy Sector.
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