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Adapt IT has posted another healthy set of results, with interim headline earnings per share (HEPS) rising by 42% to 23.96c.

The JSE-listed company saw turnover rise by 19% to R310 million for the six months ended 31 December. Organic and acquisitive growth contributed 13% and 6% respectively.

"We have been consistent in pursuing diversification through an organic and acquisitive growth strategy which has contributed to this positive set of results for Adapt IT," according to CEO Sbu Shabalala.

Part of the acquisitive strategy in the past period was the 100% purchase of CQS Investment Holdings, a company that provides niche audit, financial and risk management software services and solutions.

Adapt IT acquired CQS for around R217 million − a combination of debt of R160 million and the issue of seven million Adapt IT shares. The Competition Commission gave its approval for the deal in December and it was consolidated with effect from 31 December. This means CQS has made no contribution to profit in the current interim results. However, Shabalala believes the acquisition will bolster Adapt IT's financial services segment.

"We are excited to have the CQS team join the Adapt IT Group of like-minded people with a passion for delivering high value software solutions to our clients," says Shabalala.

Adapt IT has also announced another acquisition that fell outside of the reporting period. As of 5 January, the group acquired the intellectual property and business operations of a services company which provides student management solutions to the education sector in New Zealand. The total consideration payable is R3.4 million.

The Durban-based company also saw a 50% jump in interim operating profit, to R53 million "through further synergies being maximised across the Adapt IT businesses". Revenue rose 20% to almost R315 million compared to a year ago.

"Adapt IT is well diversified across the four major sectors in which it operates, improving resilience to adverse economic cycles as are currently being experienced in the manufacturing and the oil industries," it says.

The South African business now represents 72% of turnover, with 10% from other African countries and 18% from global customers.

"Despite the challenging market conditions, our 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." concludes Shabalala.

"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 two certification by our South African operating entity."

Adapt IT says it intends to enhance its black ownership status further through funding arrangements for future acquisitive growth.

The company provides specialised 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.

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