Adapt IT releases voluntary trading statement
Yesterday Adapt IT, a provider of specialised software and digitally-led business solutions, released a voluntary trading statement citing anticipated changes to its earnings for the financial year ended 30 June 2020. The company's audited financial results are due to be released on 26 October 2020.
“Although JSE listing requirements do not compel us to disclose these anticipated changes, we value transparency with our investors and other stakeholders. We take this opportunity to communicate on how the Covid-19 pandemic has affected our business and our responses to manage this,” says Adapt IT CEO Sbu Shabalala.
The company anticipates that its earnings per share (EPS) will increase between 9% and 14% and headline earnings per share (HEPS) will increase between 24% and 29%; excluding the effects of implementing IFRS 16 ( International Financial Reporting Standard), a like-for-like comparison representing trading performance.
Shabalala says cash generation in the business remained strong and its net gearing was below the target level and significantly lower than in the prior year. The company also met all its debt covenants.
Resilience built over the years
Founded in South Africa, Adapt IT has over the years expanded its reach across Africa, Europe and Asia Pacific through acquisitions. Its expansion into Africa took place through the acquisition of Aquilon, expanding Adapt IT into Africa's growing energy sector.
The acquisition of LGR Telecommunications, provider of end-to-end data warehouse and business intelligence systems contributed to its strong presence on the continent. The company currently provides solutions to the education, manufacturing, financial services, energy, communications and hospitality sectors.
Shabalala says Adapt IT's diversification across sectors greatly contributed to the company’s resilience during the pandemic. “Adapt IT has come through the trying period well. While some divisions, particularly our hospitality business, performed at reduced capacity due to Covid-19 regulations; other divisions found opportunities to expand.”
Response to Covid-19
Shabalala adds that the business was proactively virtualised before lockdown regulations were implemented and “this was met by an exceptional response from our people, with increased commitment and productivity throughout the remote working experience.”
The company’s key responses focused on ensuring employee safety, providing continuous service to customers, supporting clients who were hardest hit and managing its cash flow very closely. “The business is stable and intently focused on trading through the future uncertainty as the effects of the pandemic continues to unfold,” Shabalala concludes.