Adapt IT, which has been on the acquisition trail, has boosted its top line thanks to several recent acquisitions.
The group yesterday reported its interim results and said revenue grew 39%, to R189.6 million, while operating profit moved 75% higher, to R20.5 million. As a result, its operating margin has improved from 8.6% to 10.8% in the six months to December.
Adapt IT says the bulk of its revenue gain (26%) was thanks to acquisitions, with the balance (13%) coming from organic improvements. Adapt IT's latest acquisition was SAP consultancy Aquilon, on which it spent almost R100 million last October.
"The Aquilon acquisition extended Adapt IT's services to Africa's growing energy sector, strengthened the company's presence in Cape Town and bolstered our SAP solutions expertise," says CEO Sbu Shabalala.
The contribution from its latest takeover was R28 million in revenue and R7.9 million in operating profit. A year ago, the R11.7 million acquisition of Swicon360 added about R10 million to the top line, and around R1 million to its net profit.
Adapt IT says it continues to look for synergistic and earnings-enhancing software businesses to buy out while also increasing its focus on other markets, such as Africa. The group is also increasing its transformation focus.
Shabalala believes the future will provide exciting opportunities: "We are building on the strong foundation already established in order to create a sizeable leading ICT business, which delivers above sector average growth and returns."
Adapt IT reported earnings per share 64% higher, to 13.71c, while headline earnings per share - a key indicator of core company performance - gained 65%, to 13.74c. Its share price closed 3.39% higher, at 610c, giving it a market capitalisation of R680 million.
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