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ADAPT IT HOLDINGS LIMITED - Adapt IT Unaudited Condensed Consolidated Interim Group Results for the Six Months Ended 31 December 2014

Release Date: 09/02/2015 07:30
Code(s): ADI     PDF:  
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Adapt IT Unaudited Condensed Consolidated
Interim Group Results for the Six Months Ended 31 December 2014

ADAPT IT HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number 1998/017276/06
Share code: ADI
ISIN: ZAE000113163

Adapt IT unaudited condensed consolidated
INTERIM GROUP RESULTS
for the six months ended 31 December 2014

OVERVIEW
Adapt IT provides a variety of specialised turnkey IT solutions and services to the
education, mining and manufacturing, energy and financial services sectors. Adapt
IT has customers in 18 countries in Africa, Asia, Australasia, Europe and North America,
and its services and solutions span the complete IT lifecycle, from consulting and
application design, through to delivery and support.

INDUSTRY SECTORS (TURNOVER)

Financial Services 18 %

- Business Intelligence and Analytics
- Project Management
- Recruitment Services

Manufacturing 34%

- ERP Implementation
- Human Capital Management Services
- Development and Integration Services

Energy 20%

- Business Advisory Services
- Technical Advisory Services
- SAP IS-OIL
- Fuel-FACS

Education 28%

- Education Administration Systems
- Development and Integration Services
- Support Services

OUR BUSINESS

Consulting

- Business Consulting 
  Guiding leading enterprises to achieve business transformation

- IT Consulting 
  Leveraging technologies to improve business efficiencies

- Innovation 
  Applying new technology solutions to exceed client requirements 

Software

- Web-based Solutions 
  Efficiently developed Cloud-ready proprietary software solutions

- On Premise 
  Leveraging our client's existing technology infrastructure

- Cloud Solutions 
  Providing Software as a Service for maximised efficiency

- Mobile Solutions 
  Ensuring accessibility to solutions from anywhere

Support

- SLA Management 
  Providing remote and on-site 24/7 support

- ITIL Certified 
  ITIL certified support centre

GEOGRAPHIC TURNOVER

   78%             10%              8%             3%          1%
South Africa   Other African   North America   Australasia   Europe
                countries

FINANCIAL HIGHLIGHTS

UP 38%     UP 85%                   UP 35%
Turnover   Profit from operations   HEPS

FINANCIAL REVIEW
Turnover for the six month period to December 2014 increased 38% to
R261,3 million (2013: R189,6 million). Organic growth was 11% and
acquisitive growth 27%. Profit from operations increased 85% to R37,9 million
(2013: R20,5 million), representing an improved operating profit margin
of 14,5% (2013: 10,8%). All segments of the business grew turnover and
operating profit.

Interim Earnings per Share (EPS) improved by 36% to 18,57 cents per share
(cps) from 13,71 cps and Interim Headline EPS (HEPS) improved by 35% to
18,58 cps from 13,74 cps.

Ordinary dividend number 12, in respect of the year ended 30 June 2014, of
8,23 cents per share, being a four times cover ratio, was paid to shareholders
on 15 September 2014. Adapt IT's policy is to declare a dividend after
financial year-end and not at the interim reporting date.

STRATEGY
Adapt IT continues to realise synergies between its specialised software
businesses to yield higher organic growth and margins. Further strategic,
synergistic and earnings enhancing software business acquisitions will be
pursued.

ACQUISITION
Adapt IT acquired the AspiviaUnison companies ("AspiviaUnison")
effective 1 September 2014, in line with its acquisitive growth strategy.
AspiviaUnison provides Telecommunications Management Software
Solutions which now contributes to the Financial Services and
Manufacturing segments of Adapt IT. AspiviaUnison's results, for the
four months, are included in these interim results. Refer to the business
combination note 9.

BEE CAPITAL RAISE
Under its general authority (granted by shareholders at the last AGM)
to make issues of shares for cash within the authorised parameters,
Adapt IT issued 6 108 029 shares for cash of R41,8 million on
17 December 2014 to specific Black third parties to fund the acquisition of a
small foreign education sector business in New Zealand (R7,2 million) and
the majority of the second cash tranche of the AspiviaUnison purchase
consideration (R36 million) together with certain transaction costs. This
share issue was at a 10% discount to the 30-day weighted average traded
price and represented a 5% dilution to existing shareholders.

Using this capital raising mechanism was expedient, cost effective and
enhanced Adapt IT's Black ownership equity status, specifically its Broad-
Based Black female ownership equity status to 2,82% which is progress
towards the company's goal of meeting the requirement of the new B-BBEE
codes. Increased focus on transformation is being prioritised to ensure
alignment with the new Broad-Based Black Economic Empowerment
Codes.

OUTLOOK
Our outlook remains positive as we continue to build on the strong well
diversified foundation which we have established to create a sizeable
leading ICT business which delivers above sector average growth and
returns.

BOARD
Ms Thembisa Dingaan resigned from the board on 25 November 2014. The
board is in the process of appointing a non-executive director to replace
Ms Dingaan. Mr Craig Chambers was temporarily appointed as a member
of the Audit and Risk Committee with effect from 25 November 2014.

APPRECIATION
We thank our customers, partners and service providers for their continued
support and members of the board and Adapt IT Group employees for
their dedication which underpins our success.

On behalf of the board

Craig Chambers                                       Sbu Shabalala
Independent, non-executive Chairman                  Chief Executive Officer

6 February 2015

CONDENSED CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                         Unaudited    Unaudited     Audited
                                                          6 months     6 months        Year
                                                             ended        ended       ended      Period-
                                                            31 Dec       31 Dec     30 June    on-period
                                                              2014         2013        2014     variance
                                                Notes        R'000        R'000       R'000            %
Revenue                                                    262 470      190 892     408 546           37
Turnover                                                   261 346      189 580     406 301           38
Cost of sales                                            (144 267)    (109 040)   (227 800)           32
Gross profit                                               117 079       80 540     178 501           45
Administrative, selling and other costs                   (79 371)     (60 267)   (128 972)           32
Sundry revenue                                                 194          219         159         (11)
Profit from operations                                      37 902       20 492      49 688           85
Finance income                                      3          930        1 094       2 087         (15)
Finance costs                                       4      (5 597)        (384)       (907)        1 358
Profit before taxation                                      33 235       21 202      50 868           57
Income tax expense                                        (10 995)      (6 208)    (12 745)           77
Profit for the period                                       22 240       14 994      38 123           48
Other comprehensive income                                    (57)          514         761        (111)
Exchange differences arising from translation  
  of foreign operations                                       (57)          514         761
Income tax effect                                                –            –           –
 
Total comprehensive income                                  22 183       15 508      38 884           43
Headline earnings:  
Profit attributable to ordinary shareholders                22 240       14 994      38 123           48
Loss on sale of property and equipment                           7           38         112         (82)
Headline earnings                                           22 247       15 032      38 235           48
Number of ordinary shares in issue               (000)     129 201      111 499     111 499           16
Weighted average number of  
  ordinary shares in issue                       (000)     119 731      109 395     110 674            9
Diluted average number of ordinary  
  shares in issue                                (000)     119 731      109 395     113 873            9
Basic earnings per share                       (cents)       18,57        13,71       34,45           36
Headline earnings per share                    (cents)       18,58        13,74       34,55           35
Diluted basic earnings per share               (cents)       18,57        13,71       33,48           36
Diluted headline earnings per share            (cents)       18,58        13,74       33,58           35
Dividend per share                             (cents)        8,23         5,56        5,56           48

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                         Unaudited    Unaudited     Audited
                                                          6 months     6 months        Year
                                                             ended        ended       ended
                                                            31 Dec       31 Dec     30 June
                                                              2014         2013        2014
                                                Notes        R'000        R'000       R'000
ASSETS 
Non-current assets                                         392 420      185 442     188 662
Property and equipment                                      31 698       28 333      30 751
Intangible assets                                            8 612        6 341       8 323
Goodwill                                            6      336 052      133 487     133 487
Deferred taxation asset                                     16 058       17 281      16 101
Current assets                                             208 111      177 815     111 485
Trade and other receivables                                174 401      148 654      91 267
Inventory                                                      130            –           –
Current tax receivable                                       6 345            –       4 301
Cash and cash equivalents                                   27 235       29 161      15 917
  
Total assets                                               600 531      363 257     300 147
EQUITY AND LIABILITIES  
Equity                                                     287 596      161 725     185 101
Share capital                                                   13           11          11
Share premium                                              128 820       23 926      23 926
Other capital reserves                                      36 000       52 000      51 056
Foreign currency translation reserve                         1 832        1 642       1 889
Revaluation reserve                                          1 602        1 602       1 602
Retained earnings                                          119 329       82 544     106 617
Non-current liabilities                                     90 569       30 894       7 981
Interest-bearing borrowings                         7       20 273       27 389       4 276
Financial liabilities                               9       66 086            –           –
Deferred taxation liability                                  4 210        3 505       3 705
Current liabilities                                        222 366      170 638     107 065
Trade and other payables                                    45 792       44 091      27 174
Provisions                                                   9 054       15 416      20 824
Deferred income                                     8       96 432       80 061      54 233
Current tax payable                                          9 498        5 938       1 816
Current portion of interest-bearing borrowings      7       26 139       16 271       3 018
Financial liabilities                               9       35 451        8 861           –
  
Total equity and liabilities                               600 531      363 257     300 147
Net asset value per share                      (cents)      222,60       145,05      166,01
Net tangible asset value                       (cents)     (46,33)        21,11       46,39
Liquidity ratio                                (times)        0,94         1,04        1,04
Solvency ratio                                 (times)        1,92         1,80        2,61
Market price per share  
   Close                                       (cents)         810          490         774
   High                                        (cents)         885          501         950
   Low                                         (cents)         582          231         231
Capital expenditure for the period             (R'000)       4 839        3 245      11 017
Capital commitments                            (R'000)       3 500        4 038       7 627

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                               Unaudited    Unaudited    Audited
                                                                6 months     6 months       Year
                                                                   ended        ended      ended
                                                                  31 Dec       31 Dec    30 June
                                                                    2014         2013       2014
                                                      Notes        R'000        R'000      R'000
OPERATING ACTIVITIES
Cash generated from operations                                    12 048        7 032     60 642
Finance income                                           3           930        1 094      2 087
Finance costs                                            4       (2 463)        (384)      (907)
Dividends paid                                                   (9 528)      (6 017)    (6 017)
Taxation paid                                                   (11 492)        (671)   (15 280)
Net cash flow (utilised in)/generated from 
 operating activities                                           (10 505)        1 054     40 525
INVESTING ACTIVITIES 
Property and equipment acquired                                  (3 155)      (1 828)    (6 039)
Intangible assets acquired and developed                         (1 684)      (1 417)    (4 978)
Proceeds on disposal of property and equipment                         –            –         42
Net cash outflow on acquisition of subsidiaries          9      (33 606)     (32 207)   (32 207)
Net cash flows utilised in investment activities                (38 445)     (35 452)   (43 182)
FINANCING ACTIVITIES 
Proceeds from borrowings                                          69 036       43 660     51 900
Repayment of borrowings                                         (50 551)      (3 308)   (46 618)
Repayment of vendor loans                                              –            –   (10 156)
Issue of shares for cash                                          41 840            –          –
Net cash inflow/(outflow) from financing activities               60 325       40 352    (4 874)
Net increase/(decrease) in cash resources                         11 375        5 954    (7 531)
Exchange differences on translation                                 (57)          514        755
Cash and cash equivalents at beginning of period                  15 917       22 693     22 693
Cash and cash equivalents at end of period                        27 235       29 161     15 917

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                        Foreign
                                                   Other       Re-     currency
                               Share     Share   capital valuation  translation   Retained       Total
                             capital   premium  reserves   reserve      reserve   earnings      equity
Unaudited                      R'000     R'000     R'000     R'000        R'000      R'000       R'000
Balance at 30 June 2013           11    14 626     1 300     1 602        1 128     73 567      92 234
Total comprehensive
  income for the period            –         –         –         –          514     14 994      15 508
Profit for the period              –         –         –         –            –     14 994      14 994
Other comprehensive
  income for the period            –         –         –         –          514          –         514
Issue of treasury shares 
  for business combination         –     1 300   (1 300)         –            –          –           –
Shares to be issued                –         –    52 000         –            –          –      52 000
Issue of shares for 
  business combination             –     8 000         –         –            –          –       8 000
Shares issued during 
  the period                       –     1 753         –         –            –          –       1 753
Issue of treasury shares           –     6 247         –         –            –          –       6 247
Dividend paid                      –         –         –         –            –    (6 017)     (6 017)
Balance at 31 December 2013       11    23 926    52 000     1 602        1 642     82 544     161 725
Balance at 30 June 2014           11    23 926    51 056     1 602        1 889    106 617     185 101
Total comprehensive
  income for the period            –         –         –         –         (57)     22 240      22 183
Profit for the period              –         –         –         –            –     22 240      22 240
Other comprehensive
  income for the period            –         –         –         –         (57)          –        (57)
Shares issued during
  the period                       2   104 894  (15 056)         –            –          –      89 840
Dividend paid                      –         –         –         –            –    (9 528)     (9 528)
Balance at 31 December 2014       13   128 820    36 000     1 602        1 832    119 329     287 596

NOTES TO THE FINANCIAL STATEMENTS

1.   BASIS OF PREPARATION AND CORPORATE INFORMATION
     The unaudited condensed consolidated interim financial statements of the Group for the six months
     ended 31 December 2014 were prepared in accordance with IAS 34 Interim Financial Reporting, SAICA
     Financial Reporting Guides as issued by the Accounting Practices Committee and the requirements
     of the Companies Act No 71 of 2008 of South Africa as amended, and the Listings Requirements of
     the JSE Limited. The accounting policies applied in the preparation of these unaudited condensed
     interim consolidated financial statements are in accordance with International Financial Reporting
     Standards and are consistent with those applied in the annual financial statements for the year ended
     30 June 2014.

     The interim results have not been audited or reviewed by the Group auditors, and have been prepared
     under the supervision of Tiffany Dunsdon, CA (SA), Finance Director of Adapt IT Holdings Limited.
     
     The directors take full responsibility for the preparation of these unaudited condensed consolidated
     interim financial statements.

2.   POST-BALANCE SHEET EVENTS
     Effective 1 January 2015, the Group acquired intellectual property and a services company which
     provides student management solutions in New Zealand. The total consideration payable is R7,2 million
     and the tangible net assets of the business were R3,8 million.
     
     The transaction is not categorised in terms of the JSE Listings Requirements.
     
     No other matters have occurred between the reporting date and the date of approval of the interim
     financial statements which would have a material effect on these financial statements.

                                                            Unaudited      Unaudited    Audited
                                                               31 Dec         31 Dec    30 June
                                                                 2014           2013       2014
                                                                R'000          R'000      R'000
3.   FINANCE INCOME
     Imputed interest                                             689            571      1 321
     Bank interest                                                241            523        766
     Total finance income                                         930          1 094      2 087


4.   FINANCE COSTS
     Borrowings                                                 2 463            384        907
     Financial liabilities (imputed)                            3 134              –          –
     Total finance cost                                         5 597            384        907


5.   DIVIDENDS
     Ordinary dividend number 12 of 8,23 cents per share was paid to shareholders on 15 September 2014.
    
     It is Group policy to consider declaration of dividends at the end of the financial year and not at the
     interim reporting date.

                                                            Unaudited      Unaudited    Audited
                                                               31 Dec         31 Dec    30 June
                                                                 2014           2013       2014
                                                                R'000          R'000      R'000
6.   GOODWILL                  
     Carrying amount at beginning of period                   133 487         38 010     38 010
     Acquisition of Aquilon Companies                               –         95 477     95 477
     Acquisition of AspiviaUnison Companies                   202 565              –          –
     Carrying amount at end of period                         336 052        133 487    133 487
     Comprising:                  
     Cost                                                     336 052        133 487    133 487
     Goodwill is allocated as follows:                  
     – Adapt IT Proprietary Limited                            25 599         25 599     25 599
     – ApplyIT Proprietary Limited                                 59             59         59
     – Swicon360 Proprietary Limited                           12 352         12 352     12 352
     – Aquilon Companies                                       95 477         95 477     95 477
     – AspiviaUnison Companies                                202 565              –          –
                  
     Total                                                    336 052        133 487    133 487

     The Group tests goodwill for impairment. As at 31 December 2014, the carrying amount of goodwill was
     considered not to require impairment.
     
     The recoverable amount of goodwill has been determined based on a value in use calculation using
     cash flow projections from financial forecasts approved by senior management covering a five-year
     period. Cash flow projections take into account past experience and external sources of information.
     The valuation method used is consistent with the prior year. There have been no accumulated
     impairment losses recognised to date.
     
     The key assumptions used in the testing of goodwill are:
     
     - Discount rate of 11% (2013: 12%) (weighted average cost of capital); and
     - Projected cash flows for the five years based on a 5% (2013: 5%) growth rate.

                                                            Unaudited      Unaudited   Audited
                                                               31 Dec         31 Dec   30 June
                                                                 2014           2013      2014
                                                                R'000          R'000     R'000
7.   INTEREST-BEARING BORROWINGS           
     Non-current borrowings                                    20 273         27 389     4 276
     – Investec Private Bank Limited                           20 273         27 389     4 276
     Current borrowings                                        26 139         16 271     3 018
     – Investec Private Bank Limited                           13 639         16 271     3 018
     – Chrysalis Capital Fund Proprietary Limited              12 500              –         –
            
     Total                                                     46 412         43 660     7 294

     The Investec Private Bank Limited facilities are secured by a mortgage bond over fixed property, 100%
     of the shares held in Adapt IT Proprietary Limited and cession of book debts held by Adapt IT Holdings
     Limited and its subsidiaries. The current interest rate is 9,75% per annum.
     
     AspiviaUnison Proprietary Limited has a facility with Chrysalis Capital Fund Proprietary Limited. The
     interest rate is prime plus 5% per annum. The facility is repayable by 31 July 2015.
     
     Excess cash resources are used from time to time to reduce the facilities.

                                                            Unaudited      Unaudited   Audited
                                                               31 Dec         31 Dec   30 June
                                                                 2014           2013      2014
                                                                R'000          R'000     R'000
8.   DEFERRED INCOME                                  
     Education segment                                         76 801         66 117    36 936
     Manufacturing segment                                     17 524         12 323    16 116
     Energy segment                                             2 037          1 151     1 181
     Financial segment                                             70            470         –
     Total                                                     96 432         80 061    54 233

     The Education segment relates to annual maintenance fees invoiced in advance for the year and
     usually collected the end of January and February, the start of the education year.
     
     Manufacturing sector includes long-term software projects in progress, ongoing upgrades and other
     software-related projects for clients.

9.   BUSINESS COMBINATIONS
     9.1 Acquisition of subsidiary
         On 1 September 2014, the Group acquired the entire issued share capital of AspiviaUnison
         Proprietary Limited and its subsidiaries (AspiviaUnison).
         
         Ths AspiviaUnison companies are South African registered.
         
         AspiviaUnison is a cloud telecommunications intelligence and management solutions
         provider. With over 14 years' experience in the field of telecommunications management within
         Southern Africa. AspiviaUnison provides Telecommunications Lifecycle Management (TLM),
         Telecommunications Management Services (TMS) and Mobile Device SpendManagement
         (MDSM) software solutions. The products of AspiviaUnison comprise several crucial forward-
         looking telecommunications intelligence services that provides business intelligence on
         telecommunications billing information for a more uniform and understandable billing, integration
         of billing data with enabling technologies and understanding and control of mobile device spend.

         The purchase consideration consists of R36,0 million in cash paid on 5 November 2014 and
         R36,0 million in cash payable on or before 31 March 2015, with a further contingent consideration
         of a maximum amount of R128,0 million, which is contingent upon the achievement by
         AspiviaUnison of the following performance warranties over 28 months (Performance Warranties):
           
         - R29,4 million profit after tax for the period 1 September 2014 to 30 June 2015 (1st Performance
           Warranty period);
           
         - R40,1 million profit after tax for the period 1 July 2015 to 30 June 2016 (2nd Performance Warranty
           period); and
           
         - R21,1 million profit after tax for the period 1 July 2016 to 31 December 2016 (3rd Performance
           Warranty period).

     The maximum amount of R128,0 million (contingent earn-out portion) is payable as follows:
       
     - R48,0 million shares were issued in December 2014, pledged to Adapt IT Proprietary Limited
       as security for performance as against the Performance Warranties, and will only vest
       unconditionally upon achievement of at least R54,4 million cumulative profit after tax; and
       
     - subject and pro rata to achievement of the Performance Warranties, up to a further R80,0 million
       which is payable 60% in cash and 40% by the issue of further shares:
        
       – in respect of achievement in aggregate of the Performance Warranties in respect of the 1st and
         2nd Performance Warranty Periods, and up to 15% advance achievement of the Performance
         Warranties in respect of the 3rd Performance Warranty Period, if any, by the later of 30 September
         2016 and the final determination of any dispute which may arise in the determination of the
         profit after tax pertaining to the profit warranties; and
        
       – in respect of achievement in aggregate of the outstanding Performance Warranties as at the
         end of the 3rd Performance Warranty Period, if any, by the later of 31 March 2017, or the final
         determination of any dispute which may arise in the determination of the profit after tax, to the
         extent that the contingent earn-out portion has not already been paid.

     The number of shares to be issued, in each applicable instance thereof, shall be calculated by
     dividing the corresponding amount of the relevant contingent earn-out portion by the weighted
     average traded price of Adapt IT shares for a period of 30-trading days prior to the relevant date
     as specified in the agreement.
     
     The latest financial projections for AspiviaUnison indicate that the profit warranties will be achieved
     and accordingly the maximum contingent purchase consideration has been accounted for
     resulting in a maximum purchase consideration of R200 million. The future contingent purchase
     consideration, to be settled in cash and shares as set out above, is recorded at fair value as
     a financial liability, by taking into account the present value of these future settlements using
     a discount factor equal to a borrowing rate. The fair value of the consideration payable at
     acquisition date was R182,4 million.
     
     The fair value of the net assets acquired amounted to R1,7 million, resulting in goodwill of
     R180,7 million at acquisition. The purchase consideration paid for the combination effectively
     included amounts in relation to the benefit of the expected synergies, revenue growth, new market
     penetration and future market development.
     
     AspiviaUnison adds another significant pillar to Adapt IT's growing vertical software solutions set.
     The acquisition, which is in line with Adapt IT's strategy of targeted acquisitive growth, enables
     the Adapt IT Group to further diversify and bolster its customer base, especially in the Financial
     Services Industry (FSI) and the wider private and targeted public sector markets.

     The fair values of the identifiable net assets and liabilities of the AspiviaUnison companies as at
     the date of acquisition were:

                                                                                   Fair value
                                                                                   recognised
                                                                                           on
                                                                                  acquisition
                                                                                        R'000
     Assets
     Property and equipment                                                               335
     Intangible assets                                                                     33
     Purchased goodwill                                                                21 861
     Deferred taxation                                                                    381
     Inventory                                                                             16
     Trade and other receivable                                                        11 604
     Cash and cash equivalents                                                          2 394
     Total assets                                                                      36 624
     Liabilities
     Current portion of non-interest-bearing borrowings (previous shareholders)           439
     Current portion of interest-bearing borrowings                                    20 194
     Trade and other payables                                                           6 013
     Provisions                                                                         1 222
     Current tax payable                                                                7 057
     Total liabilities                                                                 34 925
     Total identifiable net assets                                                      1 699
     Goodwill arising on acquisition                                                  180 704
     Fair value of consideration payable                                              182 403
     Fair value of consideration payable:
     Cash paid                                                                         36 000
     Shares issued in December 2014                                                    48 000
     Fair value of cash to be paid on or before 31 March 2015
       (current financial liabilities)*                                                34 357
     Fair value of contingent purchase consideration owing in respect of
       acquisition and settled through issue of shares and cash when relevant
       warranties have been fulfilled (non-current financial liabilities)*             64 046
     Fair value of consideration payable                                              182 403
     Cash outflow on acquisition:
     Net cash acquired with the subsidiary                                              2 394
     Cash paid                                                                       (36 000)
     Net cash outflow on acquisition                                                 (33 606)
     
     Fair value of the assets acquired approximates their carrying value at the acquisition date.
  
    * The fair value of contingent purchase consideration financial liability as at 31 December 2014,
      after recognising a charge of R3,1 million to finance costs, was R35,5 million and R66,1 million
      relating to current and non-current financial liabilities respectively.

    From the date of acquisition, AspiviaUnison has contributed R6,8 million to the profit after tax and
    R26,9 million to the turnover of the Group.

    Acquired receivables represent the gross contractual amounts which approximates fair value and
    which is further estimated to be fully recoverable.

    Goodwill recognised is not deductible for tax purposes.
    
    Acquisition related costs of R4,0 million have been expensed and are included in administrative,
    selling and other costs on the statement of profit or loss and other comprehensive income.

10. SEGMENT ANALYSIS
    Management monitors the operating results of its business units separately for the purpose of making
    decisions about resource allocation and performance assessment. Monthly management meetings
    are held to evaluate segment performance against budget and forecast.

    The following tables present revenue and profit information regarding the Group's operating segments
    for the six months ended 31 December 2014 and 31 December 2013, respectively:

                                             Manu-   Financial
                             Education   facturing    Services     Energy     Other       Total
                                 R'000       R'000       R'000      R'000     R'000       R'000
    Six months ended
      31 December 2014
    Turnover                    71 743      89 755      47 940     51 908         –     261 346
    Segment profit 
      from operations           12 052      13 596       7 459     11 593   (6 798)      37 902
    Operating profit margin        17%         15%         16%        22%                   15%
    Six months ended 
      31 December 2013 
    Turnover                    59 989      68 381      33 256     27 954         –     189 580
    Segment profit 
      from operations            8 013       3 414       3 417      7 916   (2 268)      20 492
    Operating profit margin        13%          5%         10%        28%                   11%
    

    The following table presents segment assets and liabilities of the Group's operating segments as at
    31 December 2014 and 31 December 2013, respectively:
        
                                             Manu-   Financial
                             Education   facturing    Services     Energy     Other       Total
                                 R'000       R'000       R'000      R'000     R'000       R'000
    Six months ended       
      31 December 2014       
    Total assets               142 208     202 408     123 586    129 717     2 612     600 531
    Total liabilities          102 052     185 383      15 396      9 180       924     312 935
    Six months ended         
      31 December 2013         
    Total assets               126 606      71 901      28 072    135 405     1 273     363 257
    Total liabilities           94 176      69 473       4 905     30 266     2 712     201 532
  
CORPORATE INFORMATION

ADAPT IT HOLDINGS LIMITED                      TRANSFER SECRETARY
Incorporated in the Republic of South Africa   Computershare Investor Services Proprietary Limited
Registration number 1998/017276/06             PO Box 61051, Marshalltown, 2107
Share code: ADI                                T +27 (0) 11 370 5000
ISIN: ZAE000113163                             F +27 (0) 11 688 5200


COMPANY SECRETARY                              AUDITORS
Statucor Proprietary Limited                   Deloitte & Touche
22 Wellington Road
Parktown                                       SPONSOR
2193                                           Merchantec Capital
                                               2nd Floor, North Wing
REGISTERED OFFICE                              Hyde Park Corner Office Suites
5 Rydall Vale Office Park                      Corner 6th Road and Jan Smuts Avenue
Rydall Vale Crescent                           Hyde Park
La Lucia Ridge                                 Johannesburg
4019                                           2196
KwaZulu-Natal
South Africa                                   CORPORATE BANKERS
                                               The Standard Bank of South Africa Limited
DIRECTORS                                      Absa Bank
Craig Chambers* (Chairman)
Sbu Shabalala (Chief Executive Officer)        LEGAL REPRESENTATIVES
Tiffany Dunsdon (Financial Director)           Garlicke & Bousfield
Bongiwe Ntuli*                                 Read Hope Phillips Thomas Cadman Incorporated
Oliver Fortuin*                                Shepstone & Wylie
* Independent non-executive director

                                               ADAPT IT WEBSITE
                                               www.adaptit.co.za

REGIONAL OFFICES

DURBAN                      JOHANNESBURG            PRETORIA                CAPE TOWN
5 Rydall Vale Office Park   The Braes               50 Bushbuck Lane        Great Westerford
Rydall Vale Crescent        Adapt IT House          Monument Park           3rd Floor
La Lucia Ridge              193 Bryanston Drive     0181                    240 Main Road
4019                        Bryanston               Pretoria                Rondebosch
KwaZulu-Natal               Johannesburg                                    Cape Town

T +27 (0) 31 514 7300       T +27 (0) 11 460 5300   T +27 (0) 12 425 5600   T +27 (0) 21 200 0480
F +27 (0) 86 602 8961       F +27 (0) 11 460 5301   F +27 (0) 12 460 5377



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