Success from specialisation

One of the main reasons for keeping an eye on the microcaps, apart from the intrinsic delight of the sturm und drang that you find among the minnows, is that there’s plenty of upside in spotting one that’s getting big enough to enter the target area of the institutional investor.

All of a sudden the weaponry that can be directed at the target goes from small calibre to full bore, and all it takes is for one decent-sized player to decide to have a go and the price will take off.

Of course the underlying business must be performing well enough to make a big player take the plunge, and Adapt IT has done a solid job in establishing a platform. The group has the scale to compete, with more than 1,000 technology professionals servicing customers in over 40 countries from its network of offices throughout Africa and in Ireland, Australia and New Zealand.

But more importantly, Sbu Shabalala has built an organisation that doesn’t attempt to offer one-size-fitsall solutions across the board, but rather specialises in particular niches where it has deep expertise. It focuses on the education, manufacturing, energy, financial services and hospitality sectors, aiming to design solutions to each sector’s particular challenges. This approach also drives the company’s acquisition strategy, concentrating on targets that complement its skills base in its chosen niches.

The share price underwent a pretty savage correction during 2017, but the momentum appears to have changed, and with the release of solid results it’s climbing once more.

Sbu Shabalala’s company specialises in particular niches where it has deep expertise