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THE absence of fee increases at tertiary institutions has slowed software developer Adapt IT’s organic growth, as the group had been unable to raise prices for its clients, it said on Thursday.

The group reported a 38% rise in revenue to R796.2m for the year to June, mainly lifted by acquisitions, which contributed 29%. Organic growth in that period was 9%.

The fall in oil prices also affected organic growth.

Adapt IT provides a variety of software solutions to the education, manufacturing, energy, and financial sectors.

CEO Sbu Shabalala said the group offset the slow growth in SA by aggressively expanding its presence outside the country.

Adapt IT — which has a presence in 38 countries — generated 73% of turnover from SA, 13% from other African countries, and the remaining 14% was split between the Americas, Australasia, and Europe.

The group recently bought three software companies, CQS Investment, Meta Office, and Multimatics, which expanded its footprint and gave it access to new clients.

CQS was Adapt IT’s biggest acquisition, having paid R216.8m for the distributor of software solutions for financial services such as auditing, risk management, and financial reporting. The company contributed R33m to aftertax profit.

"The acquisition of CQS has significantly increased the contribution of this market by providing expansion into the auditing and accounting professions with a broader range of software offerings," Shabalala said.

Earnings per share improved 36% to 57.61c. Headline earnings per share improved 36% to 57.54c. Operating margins are up from 15% to 17%.

Shabalala said Adapt IT’s strategy was to remain an "industry-focused niche software provider which grows turnover and profit at a much higher rate than the South African ICT market".

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