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Preliminary summarised consolidated audited results for the year ended 30 June 2015, final dividend declaration
ADAPT IT HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number 1998/017276/06
Share code: ADI
ISIN: ZAE000113163
("Adapt IT" or "the Company" or "the Group")
PRELIMINARY SUMMARISED CONSOLIDATED AUDITED RESULTS
FOR THE YEAR ENDED 30 JUNE 2015, FINAL DIVIDEND DECLARATION
AND NOTICE OF ANNUAL GENERAL MEETING
42%
TURNOVER
89%
OPERATING PROFIT
35%
HEADLINE EARNINGS
PER SHARE
SUMMARISED STATEMENTS OF PROFIT
OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Group Group Company Company
2015 2014 2015 2014
R R R R
Revenue 578 049 095 408 546 471 7 267 700 14 811 282
Turnover 575 323 868 406 300 843 – –
Cost of sales (299 108 714) (227 799 448) – –
Gross profit 276 215 154 178 501 395 – –
Administrative, selling and other costs (182 398 053) (128 971 855) (6 134 407) (14 858 240)
Sundry revenue – 158 787 7 267 700 14 811 282
Profit/(loss) from operations 93 817 101 49 688 327 1 133 293 (46 958)
Finance income 2 725 227 2 086 841 – –
Finance costs (11 247 056) (907 425) (2 641) (1 310)
Share of profits of equity accounted investment after tax 168 200 – – –
Profit/(loss) before taxation 85 463 472 50 867 743 1 130 652 (48 268)
Income tax expense (27 516 457) (12 744 711) (407 860) (104 511)
Profit/(loss) for the year 57 947 015 38 123 032 722 792 (152 779)
Attributable to:
Equity holders of the parent 57 947 015 38 123 032 722 792 (152 779)
Other comprehensive income
Items that will not be reclassified to profit and loss 1 942 462 – – –
Revaluation of land and building 1 406 984 – – –
Income tax effect 535 478 – – –
Items that may be reclassified subsequently to profit and loss 529 847 761 298 – –
Exchange differences arising from translation of foreign operations 529 847 761 298 – –
Total comprehensive income/(loss) 60 419 324 38 884 330 722 792 (152 779)
Attributable to:
Equity holders of the parent 60 419 324 38 884 330 722 792 (152 779)
Basic earnings per share (cents) 46,57 34,45
Basic diluted earnings per share (cents) 45,46 33,48
SUMMARISED STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Group Group Company Company
2015 2014 2015 2014
R R R R
ASSETS
Non-current assets 392 214 992 185 241 598 50 010 248 50 301 463
Property and equipment 31 705 928 30 751 151 – –
Intangible assets 10 873 035 8 323 033 – –
Goodwill 336 051 950 133 486 825 – –
Interest in subsidiaries and share trust – – 48 115 401 48 115 401
Loans to subsidiaries – – 1 390 006 1 391 804
Equity accounted investment 168 200 – – –
Deferred taxation asset 13 415 879 12 680 589 504 841 794 258
Current assets 153 804 606 111 484 922 71 120 533 209 030
Trade and other receivables 112 111 658 91 266 975 890 765 174 783
Amounts owing by subsidiaries – – 70 141 692 –
Current tax receivable 12 720 662 4 301 168 – –
Cash and cash equivalents 28 972 286 15 916 779 88 076 34 247
Total assets 546 019 598 296 726 520 121 130 781 50 510 493
EQUITY AND LIABILITIES
Equity 326 362 080 185 100 627 118 478 161 24 583 303
Share capital 12 920 11 150 12 920 11 150
Share premium 128 819 663 23 925 590 124 104 651 19 210 578
Other capital reserves 26 594 829 51 055 840 12 860 454 15 055 840
Equity compensation reserve 530 517 – – –
Foreign currency translation reserve 2 419 112 1 889 265 – –
Revaluation reserve 3 544 400 1 601 938 – –
Retained earnings 164 440 639 106 616 844 (18 499 864) (9 694 265)
Non-current liabilities 77 848 375 4 561 378 – –
Interest-bearing borrowings 8 521 023 4 275 947 – –
Financial liabilities 69 224 164 – – –
Deferred taxation liability 103 188 285 431 – –
Current liabilities 141 809 143 107 064 515 2 652 620 25 927 190
Trade and other payables 33 614 633 27 173 765 754 225 864 123
Provisions 26 466 046 20 823 698 1 859 116 2 898 085
Deferred income 65 287 590 54 232 537 – –
Amounts owing to subsidiaries – – – 22 085 587
Current tax payable 618 838 1 816 200 39 279 79 395
Current portion of interest-bearing borrowings 15 822 036 3 018 315 – –
Total equity and liabilities 546 019 598 296 726 520 121 130 781 50 510 493
Number of ordinary shares in issue 129 201 421 111 499 091
Net asset value per share (cents) 252,60 167,25
Tangible net asset value per share (cents) 47,70 46,73
At 30 June 2015 the carrying values of the financial assets and financial liabilities are considered by
management to approximate their fair value, due to their short-term nature. All financial assets and
liabilities are carried at amortised cost and hence no fair value disclosure is necessary, in terms of
the fair value hierarchy requirements of IFRS 7 Financial Instruments: Disclosures.
SUMMARISED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Group Group Company Company
2015 2014 2015 2014
R R R R
OPERATING ACTIVITIES
Cash generated from/(utilised in) operations 105 387 069 60 642 283 (731 556) 1 482 331
Finance income 1 018 543 2 086 841 – –
Finance costs (4 425 757) (907 425) (2 641) (1 310)
Dividends paid (9 528 391) (6 017 386) (9 528 391) (6 017 386)
Taxation paid (44 191 308) (15 279 581) (158 559) (251 674)
Net cash flow from/(utilised in) operating activities 48 260 156 40 524 732 (10 421 147) (4 788 039)
INVESTING ACTIVITIES
Property and equipment acquired (4 322 657) (6 038 613) – –
Intangible assets acquired and developed (6 083 953) (4 978 014) – –
Proceeds on disposal of property and equipment 67 525 41 648 – –
Net cash outflow on acquisition of subsidiaries (63 877 413) (32 206 631) – –
Net cash utilised in investment activities (74 216 498) (43 181 610) – –
FINANCING ACTIVITIES
Proceeds from borrowings 132 120 285 51 900 000 – –
Repayment of borrowings (135 265 514) (46 618 257) – –
Issue of shares for cash 41 839 999 – – –
Issue of Company's shares – – 104 895 843 1 753 242
Increase in amounts owing (by)/to subsidiaries – – (94 420 867) 801 625
Repayment of vendor loans (439 174) (10 155 631) – –
Net cash flows from/(utilised in) financing activities 38 255 596 (4 873 888) 10 474 976 2 554 867
Net increase/(decrease) in cash resources 12 299 254 (7 530 766) 53 829 (2 233 172)
Exchange differences on translation 756 253 754 884 – –
Cash and cash equivalents at beginning of year 15 916 779 22 692 661 34 247 2 267 419
Cash and cash equivalents at end of year 28 972 286 15 916 779 88 076 34 247
SUMMARISED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Attributable to equity holders of the parent
Equity Foreign
Other com- Asset currency
Share Treasury Share capital pensation revaluation translation Retained Total
capital shares premium reserves reserve reserve reserve earnings equity
GROUP R R R R R R R R R
Balance at 30 June 2013 11 100 (277) 14 625 917 1 300 000 – 1 601 938 1 127 967 73 567 038 92 233 683
Total comprehensive income for the year – – – – – – 761 298 38 123 032 38 884 330
Profit for the year – – – – – – – 38 123 032 38 123 032
Other comprehensive income for the year – – – – – – 761 298 – 761 298
Issue of treasury shares for business
combination – – 1 300 000 (1 300 000) – – – – –
Shares to be issued – raised at
acquisition on business combination – – – 52 000 000 – – – – 52 000 000
Purchase consideration adjustment – – – (944 160) – – – 944 160 –
Issue of shares for business combination 50 277 7 999 673 – – – – – 8 000 000
Shares issued during the year 50 – 1 753 192 – – – – – 1 753 242
Issue of treasury shares – 277 6 246 481 – – – – – 6 246 758
Dividend paid – – – – – – – (6 017 386) (6 017 386)
Balance at 30 June 2014 11 150 – 23 925 590 51 055 840 – 1 601 938 1 889 265 106 616 844 185 100 627
Total comprehensive income for the year – – – – – 1 942 462 529 847 57 947 015 60 419 324
Profit for the year – – – – – – – 57 947 015 57 947 015
Other comprehensive income for the year – – – – – 1 942 462 529 847 – 2 472 309
Share-based payments – – – – 530 517 – – – 530 517
Purchase consideration adjustment – – – (9 405 171) – – – 9 405 171 –
Issue of shares for business combination 1 159 – 63 054 685 (15 055 840) – – – – 48 000 004
Shares issued during the year 611 – 41 839 388 – – – – – 41 839 999
Dividend paid – – – – – – – (9 528 391) (9 528 391)
Balance at 30 June 2015 12 920 – 128 819 663 26 594 829 530 517 3 544 400 2 419 112 164 440 639 326 362 080
Other
Share Share capital Retained Total
capital premium reserves earnings equity
COMPANY R R R R R
Balance at 30 June 2013 11 100 17 457 386 1 300 000 (3 524 100) 15 244 386
Total comprehensive loss for the year – – – (152 779) (152 779)
Issue of shares 50 1 753 192 (1 300 000) – 453 242
Shares to be issued – – 15 055 840 – 15 055 840
Dividend paid – – – (6 017 386) (6 017 386)
Balance at 30 June 2014 11 150 19 210 578 15 055 840 (9 694 265) 24 583 303
Total comprehensive profit for the year – – – 722 792 722 792
Issue of shares 1 770 104 894 073 (15 055 840) – 89 840 003
Shares to be issued – – 12 860 454 – 12 860 454
Dividend paid – – – (9 528 391) (9 528 391)
Balance at 30 June 2015 12 920 124 104 651 12 860 454 (18 499 864) 118 478 161
EARNINGS AND DIVIDENDS PER SHARE
EARNINGS PER SHARE
The calculation of earnings per share is based on the profit attributable to equity holders of R57 947 015
(2014: R38 123 032) and the weighted average number of ordinary shares in issue during the year of 124 427 314
(2014: 110 674 184). The calculation of diluted earnings per share is based on the profit of R57 947 015
(2014: R38 123 032) and the weighted average number of diluted ordinary shares in issue during the year of
127 460 251 (2014: 113 873 316).
Group Group
2015 2014
Reconciliation between earnings and headline earnings
Earnings attributable to equity holders of the parent 57 947 015 38 123 032
Adjusted for:
(Profit)/loss on sale of property and equipment (39 449) 111 975
Headline earnings 57 907 566 38 235 007
Basic earnings per share (cents) 46,57 34,45
Headline earnings per share (cents) 46,54 34,55
Diluted basic earnings per share (cents) 45,46 33,48
Diluted headline earnings per share (cents) 45,43 33,58
DIVIDENDS PER SHARE
Dividends per share (cents) 8,23 5,65
EVENTS AFTER THE REPORTING DATE
On 1 July 2015, ApplyIT (Pty) Ltd, Swicon360 (Pty) Ltd, Swicon360 HCM Spectrum (Pty) Ltd,
ITS Evula (Pty) Ltd, Aquilon (Pty) Ltd, Aquilon Evolution Holdings (Pty) Ltd,
Aquilon Evolution Consulting (Pty) Ltd, AspiviaUnison (Pty) Ltd, Unison Communications
Holdings (Pty) Ltd, Unison Communications (Pty) Ltd and Aspivia (Pty) Ltd were amalgamated into
Adapt IT (Pty) Ltd in accordance with the provisions of Section 113, 115 and 116 of the
Companies Act, 2008, as amended.
The reasons for the amalgamation are, inter alia:
- To rationalise the Adapt IT Group;
- To reduce the number of Adapt IT Group entities;
- To achieve efficiencies and savings in administrative and operational expenditure; and
- To simplify the Adapt IT Group structure.
BUSINESS COMBINATIONS
ACQUISITION OF SUBSIDIARY: ASPIVIAUNISON
On 1 September 2014, the Group acquired the entire issued share capital of AspiviaUnison (Pty) Ltd and
its subsidiaries (AspiviaUnison). The 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 Spend Management (MDSM) software solutions. The products of AspiviaUnison comprise several
crucial forward-looking telecommunications intelligence services that provide 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 000 000 in cash paid on 5 November 2014 and R36 000 000 in
cash paid on 3 March 2015, with a further contingent consideration of a maximum amount of R128 000 000,
which is contingent upon the achievement by AspiviaUnison of the following performance warranties over
28 months (performance warranties):
– R29 427 000 profit after tax for the period 1 September 2014 to 30 June 2015 (first performance
warranty period);
– R40 100 000 profit after tax for the period 1 July 2015 to 30 June 2016 (second performance warranty period); and
– R21 100 000 profit after tax for the period 1 July 2016 to 31 December 2016 (third performance warranty period).
The maximum amount of R128 000 000 (contingent earn-out portion) is payable as follows:
– R48 000 000 shares were issued in December 2014, pledged to Adapt IT (Pty) Ltd as security for performance as
against the performance warranties, and will only vest unconditionally upon achievement of at least R54 400 000
cumulative profit after tax; and
– subject and pro rata to achievement of the performance warranties, up to a further R80 000 000 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 first and second
performance warranty periods, and up to 15% advance achievement of the performance warranties in respect of the
third 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 third
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 000 000. 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 402 865.
The fair value of the net liabilities acquired amounted to R20 162 260, resulting in goodwill of R202 565 125
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
Assets
Property and equipment 335 036
Intangible assets 33 138
Deferred taxation 381 276
Trade and other receivables 11 620 276
Cash and cash equivalents 2 393 971
Total assets 14 763 697
Liabilities
Current portion of non-interest-bearing borrowings (previous shareholders) 439 174
Current portion of interest-bearing borrowings 20 194 026
Trade and other payables 6 013 657
Provisions 1 221 884
Current tax payable 7 057 216
Total liabilities 34 925 957
Total identifiable net liabilities (20 162 260)
Goodwill arising on acquisition 202 565 125
Fair value of consideration payable: 182 402 865
Cash paid 36 000 000
Shares issued in December 2014 48 000 000
Fair value at acquisition of cash paid on 3 March 2015 34 356 846
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* 64 046 019
Fair value of consideration payable 182 402 865
Cash outflow on acquisition:
Net cash acquired with the subsidiary 2 393 971
Cash paid (72 000 000)
Net cash outflow on acquisition (69 606 029)
* The fair value of contingent purchase consideration financial liability as at 30 June 2015, after
recognising a charge of R6 821 299 to finance costs, was R69 224 164 relating to non-current
financial liabilities.
Fair value of the assets acquired approximates their carrying value at the acquisition date.
From the date of acquisition, AspiviaUnison has contributed R24 320 445 to the profit after tax of the Group.
Goodwill recognised is not deductible for tax purposes.
Acquisition related costs of R4 131 022 have been expensed and are included in administrative, selling and
other costs on the statement of profit or loss and other comprehensive income.
ACQUISITION OF SUBSIDIARY: SMSS
On 1 March 2015, the Group acquired the entire share capital of Student Management
Software Solutions Limited (SMSS). SMSS is a New Zealand registered company.
SMSS has been actively involved in the education sector in New Zealand since 2003. SMSS brings a wealth
of experience to the Adapt IT fold and a host of new business opportunities.
The fair values of the identifiable net assets and liabilities of the SMSS companies as at the date of
acquisition were:
Fair value
recognised
on
acquisition
R
Assets
Property and equipment 145 090
Trade and other receivables 6 429 778
Cash and cash equivalents 5 869 965
Total assets 12 444 833
Liabilities
Trade and other payables 11 852 859
Provisions 450 625
Total liabilities 12 303 484
Total identifiable net assets 141 349
Fair value of consideration transferred 141 349
Cash outflow on acquisition:
Net cash acquired with the subsidiary 5 869 965
Cash paid (141 349)
Net cash inflow on acquisition 5 728 616
Fair value of the assets acquired approximates their carrying value at the acquisition date.
From the date of acquisition, SMSS has contributed R461 994 to the profit after tax of the Group.
Acquired receivables represent the gross contractual amounts which approximates fair value and which is further
estimated to be fully recoverable.
Acquisition related costs of R937 904 have been expensed and are included in administrative, selling and other
costs on the statement of profit or loss and other comprehensive income.
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 turnover and profit information (after Shared Services cost allocation) regarding
the Group's operating segments for the year ended 30 June 2015 and 30 June 2014 respectively:
Financial
Education Manufacturing Services Energy Other Total
R R R R R R
2015
Turnover 155 955 376 215 421 755 94 774 959 109 171 778 – 575 323 868
Segment profit/(loss) from operations 27 049 586 32 987 246 16 436 807 24 282 145 (6 938 683) 93 817 101
Operating profit margin(%) 17 15 17 22 16
2014
Turnover 123 112 190 147 718 537 64 851 759 70 618 357 – 406 300 843
Segment profit/(loss) from operations 15 127 121 12 492 200 6 410 444 18 842 133 (3 183 571) 49 688 327
Operating profit margin(%) 12 8 10 27 12
The following table presents segment assets, liabilities, trade receivables and turnover by geographic area of the Group's operating
segments as at 30 June 2015 and 30 June 2014:
Financial
Education Manufacturing Services Energy Other Total
R R R R R R
2015
Total assets 70 908 934 235 821 073 96 787 702 141 018 205 1 483 684 546 019 598
Total liabilities 71 412 565 123 300 175 12 177 393 9 928 868 2 838 517 219 657 518
Turnover from external customers by geographic area* 155 955 376 215 421 755 94 774 959 109 171 778 – 575 323 868
South Africa 116 058 874 170 620 007 94 612 107 63 526 746 – 444 817 734
African countries** 20 552 340 35 435 433 162 852 587 464 – 56 738 089
United Kingdom – – – 276 012 – 276 012
Europe 4 424 093 – – 1 402 054 – 5 826 147
Asia – – – 1 201 899 – 1 201 899
North America – 2 234 809 – 39 825 530 – 42 060 339
South America – – – 1 578 613 – 1 578 613
Australasia 14 920 069 7 131 506 – 773 460 – 22 825 035
Non-current assets by geographic area 31 367 221 182 500 040 76 731 216 101 111 674 504 841 392 214 992
South Africa 28 199 299 182 500 040 76 731 216 101 111 674 504 841 389 047 070
Europe 83 065 – – – – 83 065
Australasia 3 084 857 – – – – 3 084 857
Trade receivables by geographic area 21 962 779 36 978 846 17 477 700 24 620 776 613 776 101 653 877
South Africa 18 054 880 28 728 584 17 477 700 10 375 221 613 776 75 250 161
African countries** 2 331 151 7 060 385 – – – 9 391 536
Europe 329 339 – – – – 329 339
North America – 433 087 – 12 598 488 – 13 031 575
South America – – – 1 647 067 – 1 647 067
Australasia 1 247 409 756 790 – – – 2 004 199
2014
Total assets 58 537 006 82 732 262 28 490 299 125 961 266 1 005 687 296 726 520
Total liabilities 49 680 759 42 817 915 5 217 444 10 067 338 3 842 437 111 625 893
Turnover from external customers by geographic area* 123 210 879 147 768 990 64 686 601 70 634 373 – 406 300 843
South Africa 96 228 904 106 410 212 64 686 601 40 229 413 – 307 555 130
African countries** 16 759 352 32 062 494 – – – 48 821 846
Europe 4 510 939 – – – – 4 510 939
Asia – – – 10 428 525 – 10 428 525
North America – 2 937 733 – 19 976 435 – 22 914 168
Australasia 5 711 684 6 358 551 – – – 12 070 235
Non-current assets by geographic area 25 819 662 42 673 304 15 631 354 100 323 019 794 259 185 241 598
South Africa 25 743 187 42 673 304 15 631 354 100 323 019 794 259 185 165 123
Europe 75 855 – – – – 75 855
Australasia 620 – – – – 620
Trade receivables by geographic area 22 944 964 27 864 737 13 122 747 22 378 841 – 86 311 289
South Africa 14 852 432 14 260 177 13 122 747 11 553 251 – 53 788 607
African countries** 5 697 880 7 623 757 – – – 13 321 637
Europe 462 828 – – – – 462 828
Asia – – – 2 897 745 – 2 897 745
North America – 498 473 – 7 927 845 – 8 426 318
Australasia 1 931 824 5 482 330 – – – 7 414 154
* The turnover information above is based on the location of the customer
** African countries are: Ghana, Zambia, Tanzania, Mozambique, Namibia, Malawi, Swaziland, Lesotho, Botswana, Nigeria, Sierra Leone,
Zimbabwe, Kenya, Burundi, Congo and Rwanda
BASIS OF PREPARATION
The accounting policies applied in the preparation of these preliminary summarised consolidated audited financial statements,
which are based on reasonable judgements and estimates, are in accordance with International Financial Reporting Standards
("IFRS") and are consistent with those applied in the consolidated annual financial statements for the year ended 30 June 2015.
All amendments to IFRS were considered insignificant to the current year.These preliminary summarised consolidated audited
financial statements as set out in this report have been prepared in terms of, the Companies Act, (Act 71 of 2008), as amended, IAS 34:
Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the
Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, and the JSE Listings Requirements.
The consolidated annual financial statements have been prepared under the historical cost method, except for certain financial
instruments at fair value and property measured at fair value. The consolidated annual financial statements have been prepared
on the going-concern basis and have been prepared under the supervision of Ms Tiffany Dunsdon CA (SA), the financial director.
These preliminary summarised consolidated audited financial statements, which have been derived from the consolidated
annual financial statements and with which they are consistent in all material respects, have been audited by Deloitte & Touche.
Their unmodified audit opinions on the consolidated annual financial statements and on the preliminary summarised consolidated
audited financial statements (ISA 810) are available for inspection at the registered office of the Company. The board of
directors of Adapt IT ("the Board") takes full responsibility for the preparation of this preliminary report and that the
financial information has been correctly extracted from the underlying consolidated audited annual financial statements,
which is available for inspection at the registered office of the Company.
AUDIT REPORT
The annual financial statements for the year ended 30 June 2015 have been audited by the Group's auditors, Deloitte & Touche
and their unqualified audit report is available for inspection at the Company's registered office. The auditor's report does
not necessarily report on all of the information contained in this announcement. Shareholders are therefore advised that in
order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the audit report
together with the accompanying financial information from the Company's registered office. Any reference to future financial
performance included in this announcement has not been reviewed or reported on by the Company's auditor.
FINANCIAL PERFORMANCE
Turnover for the 12-month period to June 2015 increased 42% to R575,3 million (2014: R406,3 million), organic growth was 18%
and acquisitive growth was 24%.
Profit from operations increased 89% to R93,8 million (2014: R49,7 million), representing an improved operating profit
margin of 16% (2014: 12%). All segments of the business grew turnover and operating profit.
Adapt IT acquired telecommunications software provider, AspiviaUnison effective 1 September 2014, in line with the acquisitive
growth strategy. AspiviaUnison develops telecoms related cloud software solutions, which are used by corporates and
telecommunications carriers. A smaller offshore acquisition, SMSS (Student Management Software Systems), in New Zealand
was acquired on 1 March 2015.
Earnings per share (EPS) improved by 35% to 46,57 cents per share (cps) from 34,45 cps and headline EPS (HEPS) improved by
35% to 46,54 cps from 34,55 cps.
The Board declared its 13th ordinary dividend of 10,90 cents per share, payable in September, which represents a four times
dividend cover ratio and a 32% increase on the prior year's dividend. The Company has a policy of declaring a dividend at
the end of the financial year and not at the interim reporting date.
CHANGES TO THE BOARD DURING THE YEAR UNDER
REVIEW
There has been one change to the Board in the year under review. Thembisa Dingaan resigned from the board due to her
appointment to the Telkom SA Limited board and she has been replaced by Catherine Koffman. The board thanks Thembisa
sincerely for her valuable contribution to Adapt IT over four years.
APPRECIATION
The Board extends its sincere thanks to Adapt IT's longstanding and new customers, suppliers, partners, shareholders and
service providers for their ongoing support of Adapt IT. In addition, the Board thanks Adapt IT's staff, without whose
dedication, hard work, enthusiasm, team spirit, skills and appetite for growth and change, the Group would not be the
industry leader it is today.
DIVIDENDS: ORDINARY DIVIDEND NUMBER 13
The Board has set a policy of considering a dividend once annually, after the year-end. The Board has declared a dividend on
a dividend cover ratio of four times as the Group wishes to retain a significant proportion of profits for future growth
activities. The Group will have sufficient working capital to meet its requirements after the dividend payment. Notice is
hereby given that a cash dividend of 10,90 cents per share (the dividend) has been declared for the year ended 30 June 2015,
payable to shareholders recorded in the books of the Company at close of business on 11 September 2015.
In terms of the Listings Requirements of the JSE Limited regarding the following additional information is disclosed:
- This is a dividend as defined in the Income Tax Act, 1962, and is payable from income reserves;
- The South African dividend tax (DT) rate is 15%;
- The DT to be withheld by the Company amounts to 1,6350 cents per share;
- Therefore, the net dividend payable to shareholders who are not exempt from DT is 9,2650 cents per share, while
the gross dividend of 10,90 cents per share is payable to those shareholders who are exempt from DT;
- The issued share capital of Adapt IT at the declaration date comprises 132 854 959 ordinary shares;
- Adapt IT's registration number is 1998/017276/06; and
- Adapt IT's income tax reference number is 9410/002/71/2.
Shareholders are advised that the last day to trade cum-dividend will be Friday, 4 September 2015. Shares will trade
ex-dividend as from Monday, 7 September 2015, and the record date will be Friday, 11 September 2015. Payment will be
made on Monday, 14 September 2015. Share certificates may not be dematerialised or rematerialised during the period
Monday, 7 September 2015 to Friday, 11 September 2015, both days inclusive. This dividend, having been declared after
30 June 2015, has not been provided for in the financial statements.
NOTICE OF THE ANNUAL GENERAL MEETING AND
POSTING OF INTEGRATED ANNUAL REPORT
The integrated annual report will be mailed to shareholders on 1 September 2015 and is available 17 August 2015,
on the Group's website: www.adaptit.co.za Notice is hereby given that the 16th Annual General Meeting of
shareholders of Adapt IT will be held at 09:00 on Friday, 6 November 2015 at the office of the Company at 5 Rydall
Office Park, Rydall Vale Crescent, La Lucia Ridge, KwaZulu-Natal. The Board of directors of the Company determined that,
in terms of section 62(3)(a), as read with section 59 of the Companies Act, 2008 (Act 71 of 2008), the record date for
the purposes of determining which shareholders of the Company are entitled to participate in and vote at the Annual
General Meeting is Friday, 30 October 2015. Accordingly, the last day to trade Adapt IT shares in order to
be recorded in the register to be entitled to vote will be Friday, 23 October 2015.
DIRECTORS
Craig Chambers* (Chairman)
Sbu Shabalala (Chief Executive Officer)
Tiffany Dunsdon (Financial Director)
Bongiwe Ntuli*
Catherine Koffman*
Oliver Fortuin*
* Independent non-executive director
REGISTERED OFFICE
5 Rydall Vale Office Park
Rydall Vale Crescent
La Lucia Ridge
4019
KwaZulu-Natal
South Africa
POSTAL OFFICE
PO Box 5207
Rydall Vale Park
La Lucia Ridge Office Estate
Durban, 4019
TRANSFER SECRETARY
Computershare Investor Services (Pty) Ltd
PO Box 61051, Marshalltown, 2107
T +27 (0) 11 370 5000
F +27 (0) 11 688 5200
SPONSOR
Merchantec Capital
COMPANY SECRETARY
Statucor (Pty) Ltd
22 Wellington Road
Parktown
2193
AUDITORS
Deloitte & Touche
Durban
17 August 2015
Date: 17/08/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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