Finweek English Edition - - INVESTMENT -

lit­tle EOH,” is the way i n which one f und man­ager de­scribed IT s of t wa r e c om­pany Adapt IT. The com­pany re­cently re­ported in­terim re­sults to end De­cem­ber that saw turnover rise by 39%, op­er­at­ing profit by 75%, and head­line earn­ings per share by 65%. The com­pany is still small by JSE stan­dards – in­terim profit for the pe­riod was R14.9m – but re­sults like these will soon bring the com­pany on to the hori­zon of larger money man­agers if it continues.

In short, the com­pany pro­vides, main­tains, and cus­tomises in­te­grated soft­ware ap­pli­ca­tions that are spe­cialised but which can be com­mer­cially trans­fer­able. In other words, the com­pany cre­ates and adapts in­tel­lec­tual property in the form of soft­ware that helps businesses run ef­fi­ciently. A sketch of each of the four op­er­at­ing di­vi­sions is in­cluded be­low. MAN­U­FAC­TUR­ING: The com­pany’s so­lu­tions do ev­ery­thing from mea­sure ve­hi­cles on weigh­bridges to mon­i­tor­ing qual­ity con­trol in lab­o­ra­to­ries. Man­u­fac­tur­ing ac­counts for ap­prox­i­mately 36% of rev­enue and 15% of op­er­at­ing profit, with op­er­at­ing profit mar­gins av­er­ag­ing 10%. ED­U­CA­TION: The com­pany is in­volved with 19 of 25 lo­cal uni­ver­si­ties and 20 of the coun­try’s 50 FET (Fur­ther Ed­uca- tion and Train­ing) col­leges. The di­vi­sion ac­counts for 32% of rev­enue and 35% of op­er­at­ing profit, with op­er­at­ing profit mar­gins in the re­gion of 13%. The beauty of this busi­ness is that clients pay an­nual li­cens­ing fees up­front in Jan­uary and Fe­bru­ary, which makes the di­vi­sion ex­tremely cash-f low pos­i­tive. FI­NAN­CIAL SER­VICES: Adapt IT is largely fo­cused on pro­vid­ing busi­ness in­tel­li­gence so­lu­tions to banks. The di­vi­sion con­trib­utes ap­prox­i­mately 18% of rev­enue and 15% of op­er­at­ing profit.

What caught my at­ten­tion is the com­pany’s re­cent foray into en­ergy. The com­pany ac­quired the Aquilon group of com­pa­nies ef­fec­tive from 1 Oc­to­ber 2013. Aquilon pro­vides con­sult­ing and sys­tems in­te­gra­tion ser­vices for the oil and gas sec­tor through the de­sign, Cents







Mar 2013

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