JSE-listed Adapt IT wants to spin the services it provides to mining companies out of its manufacturing unit and target the growth sector independently.
Currently, the company has three units, of which education - at 46% ‑ provides the largest amount of revenue. Manufacturing contributes 43% and financial services, 11%. CEO Sbu Shabalala says the group wants to grow organically and enter new sectors through acquisitions.
Adapt IT yesterday released its results for the year ending June and said revenue gained 24%, to R224.8 million. Operating profit increased 48%, to R22.2 million, and basic earnings per share were 54% higher, at 17.46c, while headline earnings per share came in at 17.45c, a 52% improvement.
Growth drivers included a “big uptake” in its education solutions, organic growth and a reorganisation of its manufacturing sector to extract efficiencies, which was done without job cuts, says Shabalala.
Shabalala says the group aims to strengthen its current offerings, or enter new areas, through acquisitions. He says mining is “very attractive” and although Adapt IT has some clients in the sector, he wants to have a dedicated team to move more into the industry.
In January, Adapt IT entered the financial services sector when it bought BI Planning Services for R17.25 million, which contributed R3.5 million to the results. Shabalala says the numbers should really start coming through next year and he expects an uptake in the market.
Shabalala says the group has been driving into Africa, which now contributes 36% of revenue. SA accounts for 57% and its other operations in Australasia added the balance.
Adapt IT wants to get to a point where each geographic region contributes a third, says Shabalala.
Over the past five years, Adapt IT's revenue has increased four-fold from R56.4 million to R224.8 million. The staff complement has more than doubled from 121 to 277 employees by the end of June.
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