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South Africa: Adaptit, Infowave Merger Pays Off
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Business Day (Johannesburg)
9 May 2008
Posted to the web 9 May 2008
Lesley Stones
Johannesburg
DIRECTORS of software supplier AdaptIT Holdings believe a merger between Adapt IT and listed company Infowave late last year is paying off as its earnings have begun to rise.
Revenue for the year to February grew 17% from R49m to R57,6m and after-tax profit rose from R5,7m to R7,3m. Headline earnings per share of 8,17c were up almost 20% from 6,84c, despite 10,8-million more shares being issued to finance the merger.
It declared a dividend of 4,43c per share, up from 4,29c last year. Lower dividends would be paid in future to leave more cash in hand to support plans for future growth, the company said.
AdaptIT Holdings (ADI) supplies business software and outsourcing and consulting services focusing on Oracle, Microsoft and open-source technologies. It had faced some operational challenges in the past year, the directors said, with the main problem being skills retention in a sector suffering from a severe skills shortage.
But the brighter-looking future of the business post-merger had helped it to retain a large core team of long-serving staff and attrition had reduced as better retention tactics were introduced.
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The ApplyIT subsidiary had won significant new clients and had excellent prospects ahead, the company said. Three months of its performance are consolidated in the results, so the full effect of the merger will be seen only in the next full financial year.
CEO Sbu Shabalala said the prospects of the group for the year ahead were good, underpinned by plans to broaden its range of services and products.
It would also expand into new markets where it had the competencies to succeed. "We are confident that the merger will maximise the group's strategic growth and ensure that it moves from strength to strength."
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