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Adapt IT has posted another strong set of results, as headline earnings per share (HEPS) for the year to 30 June rose 36% to 57.54c per share.

According to CEO Sbu Shabalala, the strong performance can be attributed to a number of factors, including the implementation of "a strategy focused on sustainable growth and diversification".

"The Adapt IT strategy is to remain an industry-focused niche software provider which grows turnover and profit at a much higher rate than the South African ICT market. We have certainly achieved this goal in the period under review and in the face of adverse trading conditions in the market," he says.

The company provides software solutions and services to the education, manufacturing, energy and financial services sectors. It has customers in 38 countries across Africa, Australasia, Europe and North America.

The Durban-based IT firm reported a 38% increase in turnover, to R796 million, of which organic growth was 9% and acquisitive growth was 29%. Operating profit for the year also grew 58%, to R136 million.

Shabalala says 73% of turnover was derived from the South African market, 13% from other African countries, and the remaining 14% split between the Americas, Australasia and Europe.

"In terms of currency – 80% of turnover was generated in rands; 11% in US dollars and 9% stemmed from the specific country currency in the rest of our international markets," he adds.

Acquisitive growth

Adapt IT's acquisition of CQS Investment Holdings was consolidated from 31 December last year, which Shabalala says has served to enhance the group's presence in the financial services sector.

"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."

CQS is a value-added distributor of a combination of its own and third-party intellectual property software solutions for audit, data analytics, controls monitoring, risk management and financial reporting to financial professionals, corporates and the public sector.

Adapt IT acquired CQS for around R217 million − a combination of R160 million in cash, funded from borrowings and paid on 14 December 2015, and R57 million in shares issued on 18 December 2015.

Shabalala says Adapt IT is implementing organic growth plans that aim to consolidate and grow sector focus in the company's various operating segments and to extend its reach into African markets and beyond.

"In striving to achieve these objectives, we will innovate by developing new software offerings and will target new markets through our combined sales efforts. We will continue to seek earnings-enhancing acquisitions to supplement our growth strategy," according to Shabalala.

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