Adapt IT posts strong results despite lockdown

Adapt IT has announced its financial results for the year ended 30 June 2020, showing robust performance despite the effects of the COVID-19 pandemic.

“I am pleased to report that in a year dominated by global macroeconomic challenges and the COVID-19 pandemic, Adapt IT proved to be highly resilient, through its sound underlying business model of providing mission-critical software to its clients on a long term basis,” said Adapt IT CEO Sbu Shabalala.

Revenue increased by 3% to R1.483 billion, consisting of organic growth of -2% and growth from acquisitions of 5%.

The company’s education division contributed 16% to total revenue and delivered an EBITDA margin of 16%, while the financial services segment achieved excellent revenue growth of 12%, contributing 20% to total revenue.

The communications division grew by an encouraging 33% inclusive of acquisitive revenue, achieving an EBITDA margin of 30% and contributing 21% to total revenue.

Segments which were adversely affected by trading conditions and reflected negative growth included manufacturing, hospitality, and energy.

EBITDA improved by 9% to R250 million, headline earnings per share (HEPS) grew by 29% to 73 cents, and normalised HEPS grew by 7% to 83 cents.

Navigating the COVID-19 pandemic

The company focused on managing the impact of the COVID-19 pandemic by ensuring employee safety, providing continuous service to customers, supporting clients who were hardest hit by the pandemic, and managing cash flow stringently.

Adapt IT said the tougher trading conditions allowed the company to improve operational efficiency by cutting costs in segments that were most impacted by the pandemic.

“The response of our people to these circumstances has been outstanding, with the business virtualising pro-actively ahead of the legislated lockdown minimising impact on service delivery to our customers,” Shabalala said.

“Additional remote work digital technologies were adopted instantaneously and sustainability.”

“The already advanced state of our migration to cloud platforms was a significant enabler of our success and contributed to the improvement in employee engagement,” Shabalala said.

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Adapt IT posts strong results despite lockdown