AdaptIT to boost empowerment credentials
LISTED technology firm AdaptIT could add new investors to the company as it undertakes a capital-raising exercise.
The company, which is 30% black owned, is focusing on strengthening its empowerment credentials to align itself with the new broad-based black economic empowerment codes.
It may also implement an employee share scheme.
“We are looking at issuing shares to black investors who will invest in the business and apply those funds into growth opportunities,” AdaptIT CEO Sbu Shabalala said yesterday.
The company had made progress in improving its empowerment programmes, mainly in the employment equity segment, he said.
It increased its dividend by 48% to 8.23c per share for the year to June. The company’s net profit rose to R38.1m from R24.1m. Headline earnings per share rose 55% to 34.55c.
“Our growth has exceeded the ICT (information and communications technology) industry averages, with 33.9% turnover growth, 55% headline earning per share growth and total shareholder returns of 332%.
This had not only attracted additional institutional following, but increased shareholder confidence in AdaptIT and its development strategy,” Mr Shabalala said.
Turnover rose to R406.3m from R303.4m. The education sector contributed 30%, manufacturing 37%, energy 17% and financial services sector 16%.
Mr Shabalala said he expected more growth from the financial services sector during the 2015 financial year, and the company would seek acquisitions to strengthen this division further.
The education business is solid and cash-generative, with operating margins of 12%.
Margins at the manufacturing division were under pressure, falling from 10% to 8%. While the division made profits, “we would like to see margins go back to double digits”, the CEO said.
AdaptIT makes 25% of its revenue outside SA, with 14% coming from the rest of Africa and 6% from North America.
“We are seeing quite a bit of uptake. We are seeking to diversify further,” Mr Shabalala said.
During the period, AdaptIT acquired the Aquilon group of companies, giving it an entry point into the oil and gas industry.
Mr Shabalala said the acquisition of Aquilon had “opened us to another world. It’s a highgrowth sector and we want to gear ourselves.”