Adapt IT sees 44% jump in headline earnings

Adapt IT, a leading IT company, has reported a 44% increase in headline earnings despite facing challenges due to the COVID-19 pandemic. The company's revenue saw a slight 2% dip, which was attributed to weaker trading conditions brought on by the pandemic. Adapt IT CEO, Sbu Shabalala, highlighted that the company's hospitality business was particularly impacted by the restrictions imposed in the markets they serve. However, Shabalala expressed satisfaction with the flat revenues during the lockdown period, considering the global economic slowdown. Adapt IT managed to improve its profitability by effectively managing its operations and collecting outstanding debts from customers, leading to a 93% increase in cash generation. Looking ahead to 2021, Shabalala emphasized that the company is focusing on strengthening its balance sheet by continuing to collect and build cash reserves in preparation for the next phase of growth in the upcoming financial year. Despite facing an unsolicited offer for the business, Shabalala reiterated the management's commitment to the company's long-term vision of building a globally competitive software and services-led business. He stressed that the company remains focused on its growth strategy and deepening its presence in chosen verticals. Shabalala welcomed the recent GDP growth of 6.3%, signaling a recovery in the South African market, which bodes well for Adapt IT's growth prospects. The company operates in the real economy and the tech sector, where opportunities are emerging, especially with the rise of digital transformation. Shabalala sees the potential for growth in alignment with the recovery of the overall market. He also emphasized the importance of the auctioning of spectrum for expanding the telecom sector, which includes key clients of Adapt IT. As the market shifts towards 5G technology, Shabalala highlighted the opportunities for additional services and the potential to contribute positively to the GDP growth of South Africa.