Adapt IT foresees greater demand

2013-02-12 00:00

SERVICING stable industries and buying attractive businesses were the drivers of the solid growth shown AltX-listed group Adapt IT.

And the young students attracted to the firm would enable it to plot a positive path, said CEO Sbu Shabalala.

He told The Witness yesterday that the firm’s outlook is positive, thanks largely to an anticipated upturn in the demand for IT solutions in higher education, manufacturing, mining and banking.

Adapt IT reported a 35% increase in headline earnings per share from 6,19 cents to 8,35 cents in its interim results for the period ended December 31, 2012.

The group said revenue increased by 52% to R140,1 million. Mining and manufacturing contributed 43%, education 41% and the financial services sector 16%.

Shabalala said the education sector remained attractive and that Adapt IT recently completed a project in New Zealand. It also services clients like FET colleges and universities in South Africa and other parts of Africa.

Mining and manufacturing are key growth areas for the group.

Said Shabalala: “We have customers in manufacturing in the U.S. We have traditionally had exposure to food manufacturing in South Africa, which is stable. There hasn’t been a decline in this area.

“In terms of mining, when companies are under pressure and cut back, they look at automating and improving efficiency in the business. They need the right systems to achieve this — and this is where we come in.”

The financial services sector was also delivering the desired outcomes for the group, said Shabalala.

“We run systems for banks … and banks are expected to continue to grow. We’ve also invested in people and solutions for this industry.”

The recent acquisition of Swicon360 in an R11,7 million deal had added R10 million to the group’s turnover. Its integration into the group would take place as a matter of urgency.

“The integration is progressing as planned, with Swicon360 providing additional depth and expertise in SAP technology and solutions to the Adapt IT group.

“The acquisition is extending value-added services to our existing customer base in the mining and manufacturing industries and has greatly aided to remove barriers of entry into new sectors, while strengthening our presence in Gauteng,” said Shabalala.

Adapt IT has also been involved in skills and enterprise development.

“We have spent a lot of money on development work in KZN, particularly in attracting young students to Adapt IT,” said Shabalala.

“We also spent almost R1 million to support small enterprises last year.”

The group employs 314 permanent employees and 64 contractors.

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