Software services group AdaptIT has grown its revenue by 60% to R60.6 million for the six months ended 31 August.
However, the company admits this rise would be unlikely to continue in its full year results expected in November.
Yesterday, the KwaZulu-Natal group said net profit attributable to ordinary shares is R4.5 million, compared to R4.2 million in the previous period. Interim earnings per share have increased in line with profit to 4.73 cents from 4.36 cents, representing an 8% increase.
A segmental breakdown shows AdaptIT itself contributed a profit before tax of R4.8 million unchanged from the previous year. ITS Holdings, consolidated for two months, contributed a profit before tax of R0.7 million, and ApplyIT contributed a profit before tax of R0.1 million - a major plunge when compared to 2008's profit contribution of R2.2 million.
Siboniso Shabalala, AdaptIT's group financial director, says the rise in revenue is particularly pleasing, with R11 million of it coming from ITS. AdaptIT bought the 51% stake in ITS two months ago.
However, he is worried about the tough prevailing economic conditions that have impacted the group's two key subsidiaries, AdaptIT itself, and ApplyIT, which focus on the manufacturing and mining sectors.
“While we have managed to grow organically in using our existing client base, these have been tough times,” he says.
Shabalala also says the group's efforts in marketing itself to the public sector have yet to pay off.
“That part of our business only started this year and it has been slower than expected. Part of the reason is that there has been a change in administration following the general election and the fact that we only recently hired people to work in that sector,” he says.
AdaptIT was recently embroiled in the controversy surrounding the contract awarded to it by the Durban municipality to develop its 2010 Soccer World Cup Web site for R6.5 million.
“We believe that the value to the client will be there. When people first started looking at the site, only the first phase had been completed and that seemed to be far below value for what we were being paid. However, the next two phases are being developed and the site will give the client far better value,” Shabalala says.
AdaptIT is currently a Microsoft certified gold partner and a SAP partner. However, it is looking at expanding its Oracle offerings and is also shoring up its open source skills and producers - the latter is important due to public sector bids.
“Open source has been part of our portfolio for the past three to four years and especially since we bought InfoWave two years ago,” Shabalala says.
The immediate focus of the group is to bed down the ITS purchase and get to know and understand the business, he adds. The company also wants to invest more in AdaptIT's capacity to function as a group.
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