Adapt IT treads water in difficult final year as a listed company

Software services group Adapt IT eked out a 1% improvement in revenue in what will likely be its final set of results as a listed company on the JSE.

The group, which is the subject of an all-cash takeover bid from Canada’s Volaris Group, which, if successfully concluded will see its JSE listing terminated, said revenue for the 12-month period ended on 30 June 2021 was R1.5-billion, from R1.48-billion a year earlier.

It was a tumultuous period for Adapt IT, one which not only attracted an unwanted suitor in the form of telecommunications specialist Huge Group – also listed on the JSE – but one in which it agreed to be bought out by Volaris Group. Adapt IT also lost its long-serving CEO, Sbu Shabalala, who resigned following allegations of assault that surfaced during ugly divorce proceedings in Durban.

The group is now led by Tiffany Dunsdon, who was previously commercial director and MD of its international operations.

Revenue growth for the 2021 financial year, Adapt IT said, was “impacted by the continued Covid-19 pandemic, related regulations and lockdown restrictions”.

“While most Adapt IT divisions did not experience major business disruptions during the lockdown, some were more affected than others, with project delays and the inability of personnel to be on site negatively affecting revenue in these divisions.”

Ebitda, Heps

Earnings before interest, tax, depreciation and amortisation (before corporate activity, costs and bonus provisions) increased by 4% to R309-million, representing an improved Ebitda margin of 21% (2020: 20%). Ebitda, after corporate activity costs and bonus provision, was 18% (2020: 20%).

Cash generated from operations was R382-million (2020: R274 million). Net gearing was reduced significantly – to 17%, from 45% a year ago. Headline earnings per share decreased by 16% to 56,21c, while normalised Heps increased by 6% to 81,61c.

No dividend was declared. “The board has prioritised the reduction of borrowings and has remained prudent in preserving cash during these unprecedented times. Furthermore, the corporate activity in progress with the Volaris Group precludes a dividend, or would be adjusted for distributions and dividends, thus no dividend has been declared.” — © 2021 NewsCentral Media