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Durban-headquartered technology services group Adapt IT has reported a 42% improvement in headline earnings per share (Heps) to 23,96c in the six months ended 31 December 2015. The strong growth in Heps comes on top of a 19% improvement in turnover to R310m and a 50% jump in operating profit to R53m.

Adapt IT, which provides specialised software solutions and services to the education, manufacturing, energy and financial services sectors, said organic growth made up 13% of revenue growth, with acquisitions accounting for the remaining 6%. The jump in operating profit was the result of “further synergies being maximised across the Adapt IT businesses”.

During the second half of 2015, Adapt IT acquired 100% of CQS Investment Holdings for R216,8m, funded through a combination of debt of R160m and the issue of 7m new shares.

CQS specialises in niche audit, financial and risk management software services and solutions to financial professionals, big companies and the public sector in South Africa and the rest of Africa, Adapt IT said.

The acquisition will bolster the financial services segment of Adapt IT, it said.

“Black economic transformation remains a strategic imperative for the group as demonstrated by the achievement of a B-BBEE (broad-based black economic empowerment) level 2 certification by our South African operating entity. Adapt IT intends to enhance its black ownership status further through funding arrangements for future acquisitive growth,” it added in comments alongside its interim results.

It said it is “well diversified” across the four major sectors in which it operates. This improves “resilience to adverse economic cycles as currently being experienced in the manufacturing and the oil industries”.

“The geographic diversification has resulted in South Africa representing 72% of turnover, with 10% from other African countries and 18% from global customers. Adapt IT’s strong annuity income provides long-term sustainability.”

CEO Sbu Shabalala said that despite the “challenging market conditions”, Adapt IT’s outlook “remains positive as we continue to build on the strong well-diversified foundation, to create a sizeable leading ICT business that delivers above ICT sector average growth and returns”.

Adapt IT has been one of the best performers on the JSE in recent years. Over the past year, it has added 37%, while over three years the share price has jumped by 643%. Over five years, the share has appreciated by 1 870%. The counter closed on Friday at R13/share

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