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Interim Group Results for the Six Months Ended 31 December 2015
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)
Adapt IT unaudited condensed consolidated
INTERIM GROUP RESULTS
for the six months ended 31 December 2015
OVERVIEW
Adapt IT is an innovative information technology (IT) services and solutions provider,
delivering a variety of specialised software solutions and services to the Manufacturing,
Education, Financial Services and Energy sectors in 38 countries worldwide.
INDUSTRY SECTORS (TURNOVER)
Manufacturing Education Energy Financial
Services
36% 28% 22% 14%
- ERP - Education - Business Advisory - Business
Implementation Management Services Intelligence and
- Human Capital Systems - Technical Analytics
Management - Development Advisory Services - Project
Services and Integration - SAP IS-OIL Management
- Development Services - Fuel-FACS - Recruitment
and Integration - Support Services Services
Services
OUR BUSINESS
Consulting Software Support
- Business Consulting - Web-based Solutions - SLA Management
Guiding leading Efficiently developed Provides both remote
enterprises to Cloud-ready and on-site support,
achieve business proprietary software either 24/7, fixed hours
transformation solutions or block hours, based
on customer’s needs
- IT Consulting - On Premise and requirements
Leveraging Leveraging our client’s
technologies to existing technology - ITIL Certified
improve business infrastructure Support team
efficiencies processes are
- Cloud Solutions ITIL certified
- Innovation Providing Software as a
Applying new Service for maximised
technology solutions efficiency
to exceed client
requirements - Mobile Solutions
Ensuring accessibility
to solutions from
anywhere
GEOGRAPHIC TURNOVER
72% 10% 8% 7% 3%
South Africa Other African The Americas Australasia Europe
countries
ABOUT THIS REPORT
These unaudited condensed interim results for the six months ended
31 December 2015 have been prepared and presented in accordance
with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the
SAICA Financial Reporting Standards Council, the Listings Requirements
of the JSE Limited, the information as required by IAS 34: Interim Financial
Reporting, and the requirements of the South African Companies Act,
No 71 of 2008. The accounting policies applied in preparation of these
condensed interim results are in terms of IFRS and are consistent with those
applied in the previous annual financial statements. The comparative
information has been restated for a measurement period adjustment.
The report was prepared under the supervision of the Group Financial
Director, Ms Tiffany Dunsdon CA(SA), and has not been audited by the
group’s external auditors.
The unaudited condensed interim results were approved by the board of
directors on 5 February 2016.
ACCOUNTING POLICIES
The accounting policies adopted and methods of computation used
in the preparation of these unaudited condensed interim financial
statements are in terms of IFRS and are consistent with those of the
previous consolidated annual financial statements for the year ended
30 June 2015.
FINANCIAL HIGHLIGHTS
19% 50% 42%
Turnover Profit from HEPS
operations
FINANCIAL REVIEW
Turnover for the six months to December 2015 increased 19% to
R310,4 million (2014: R261,3 million), organic growth was 13% and
acquisitive growth was 6%. Profit from operations increased 50% to
R52,5 million (2014: R35,0 million), representing an improved operating
profit margin of 16,9% (2014: 14,5%).
Interim Earnings per Share (EPS) improved by 43% to 23,99 cents per
share (cps) from 16,81 cps and Interim Headline EPS (HEPS) improved by
42% to 23,96 cps from 16,82 cps.
Ordinary dividend number 13, in respect of the year ended 30 June 2015,
of 10,90 cents per share, on a four times dividend cover ratio, was paid to
shareholders on 14 September 2015. It is our policy to declare a dividend
after financial year end and not at the interim reporting date.
RESTATEMENT OF FINANCIAL INFORMATION
In accounting for the business combination of AspiviaUnison Proprietary
Limited for the six months ended 31 December 2014 (31 December
2014 Results), no fair value was placed on intangible assets other than
goodwill, as the valuation of these intangible assets in terms of IFRS 3 had
not been determined. The valuation of these intangible assets, namely
customer relationships and internally generated software, has now been
finalised.
The 31 December 2014 Results have been restated retrospectively
in this regard, to increase the value of intangible assets acquired to
R82,6 million and to increase the related deferred tax liability to
R23,1 million, resulting in a decrease in goodwill of R59,5 million.
Refer to the business combination note 7.2 for the details.
ACQUISITION
Adapt IT Proprietary Limited acquired 100% of CQS Investment Holdings
Proprietary Limited (CQS) during the period. This acquisition was subject
to the approval of the Competition Commission, which was granted
in December 2015. The CQS group was consolidated with effect from
31 December 2015 and there was thus no contribution to profits from
CQS in these interim results. The transaction was funded through debt
of R160 million and the issue of 7 million Adapt IT shares. Refer to the
business combination note 7.1.
POST BALANCE SHEET EVENTS
Effective 5 January 2016, the Group acquired intellectual property and
business operations of a services company which provides student
management solutions to the education sector in New Zealand. The total
consideration payable is R3,4 million and the net assets of the business
were R0,8 million. The transaction is not categorised in terms of the
JSE Listings Requirements. In terms of International Financial Reporting
Standards this is a non-adjusting event after the reporting period, that
requires disclosure.
At the date of this report, the financial effect of the transaction is unknown.
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.
STRATEGY
Adapt IT pursues diversification through targeting growth sectors and
regions with organic and acquisitive initiatives whilst continuing to realise
synergies between our specialised software businesses by creating sustainable
annuity revenue sources and yielding higher margins.
OUTLOOK
Whilst the current market conditions remain challenging, we continue the partnership
with our customers to contain costs as well take up any opportunities presented by
the current environment to grow our business. The outlook remains positive as we
continue to build on the strong, well diversified foundation already established
to create a sizeable leading ICT business that delivers above sector average growth and returns.
BOARD
There have been no changes to the directorate in the period under
review.
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
8 February 2016
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
2015 2014* 2015* variance
Notes R’000 R’000 R’000 %
Revenue 314 608 262 470 578 049 20
Turnover 310 438 261 346 575 324 19
Cost of sales (143 826) (144 267) (299 109) –
Gross profit 166 612 117 079 276 215 42
Administrative, selling and other costs (114 103) (82 298) (189 715) 39
Sundry revenue – 194 – (100)
Profit from operations 52 509 34 975 86 500 50
Finance income 1 4 170 930 2 725 348
Finance costs 2 (7 864) (5 597) (11 247) 41
Share of profits of equity accounted
investment after tax 460 – 168 –
Profit before taxation 49 275 30 308 78 146 63
Income tax expense (17 567) (10 175) (25 467) 73
Profit for the period 31 708 20 133 52 679 57
Other comprehensive income
Items that will not be reclassified to profit and loss – – 1 942
Revaluation of land and building – – 1 407
Income tax effect – – 535
Items that may be reclassified
subsequently to profit and loss 3 841 (57) 530
Exchange differences arising from translation
of foreign operations 3 841 (57) 530
Total comprehensive income 35 549 20 076 55 151 77
Headline earnings:
Profit attributable to ordinary shareholders 31 708 20 133 52 679 57
(Profit)/loss on sale of property and equipment (35) 7 (39)
Headline earnings 31 673 20 140 52 640 57
Number of ordinary shares in issue (000) 139 875 129 201 129 201 8
Weighted average number of ordinary
shares in issue (000) 132 178 119 731 124 427 10
Diluted average number of ordinary
shares in issue (000) 132 178 119 731 127 460 10
Basic earnings per share (cents) 23,99 16,81 42,34 43
Headline earnings per share (cents) 23,96 16,82 42,31 42
Diluted basic earnings per share (cents) 23,99 16,81 41,33 43
Diluted headline earnings per share (cents) 23,96 16,82 41,30 42
Dividend per share (cents) 10,90 8,23 8,23 32
* Restated for measurement period adjustment, refer to note 7.2.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2015 2014* 2015*
Notes R’000 R’000 R’000
ASSETS
Non-current assets 673 188 412 642 408 047
Property and equipment 36 287 31 698 31 706
Intangible assets 81 185 88 361 86 232
Goodwill 4 527 466 276 525 276 525
Equity accounted investment 628 – 168
Deferred taxation asset 27 622 16 058 13 416
Current assets 330 560 208 111 153 804
Trade and other receivables 233 343 174 531 112 112
Current tax receivable 1 624 6 345 12 720
Cash and cash equivalents 95 593 27 235 28 972
Total assets 1 003 748 620 753 561 851
EQUITY AND LIABILITIES
Equity 402 597 285 489 321 094
Share capital 14 13 13
Share premium 198 615 128 820 128 820
Other capital reserves 13 734 36 000 26 595
Equity compensation reserve 4 030 – 530
Foreign currency translation reserve 6 260 1 832 2 419
Revaluation reserve 3 544 1 602 3 544
Retained earnings 176 400 117 222 159 173
Non-current liabilities 257 403 112 898 98 948
Interest-bearing borrowings 5 237 432 20 273 8 521
Financial liabilities – 66 086 69 224
Deferred taxation liability 19 971 26 539 21 203
Current liabilities 343 748 222 366 141 809
Trade and other payables 98 985 45 792 33 615
Provisions 26 833 9 054 26 466
Deferred income 6 103 661 96 432 65 287
Current tax payable 5 245 9 498 619
Current portion of interest-bearing borrowings 5 36 448 26 139 15 822
Financial liabilities 72 576 35 451 –
Total equity and liabilities 1 003 748 620 753 561 851
Net asset value per share (cents) 287,83 220,97 248,52
Tangible net asset value per share (cents) (82,16) 32,26 47,71
Liquidity ratio (times) 0,96 0,94 1,08
Solvency ratio (times) 1,67 1,85 2,33
Market price per share: Close (cents) 1 300 810 842
High (cents) 1 400 885 1 095
Low (cents) 820 582 582
Capital expenditure for the period (R’000) 4 854 4 839 10 406
Capital commitments (R’000) 4 950 3 500 9 113
* Restated for measurement period adjustment, refer to note 7.2.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2015 2014 2015
Notes R’000 R’000 R’000
OPERATING ACTIVITIES
Cash generated from operations 27 193 12 048 105 387
Finance income 1 3 627 930 1 018
Finance costs 2 (4 512) (2 463) (4 426)
Dividends paid (14 481) (9 528) (9 528)
Taxation paid (17 471) (11 492) (44 191)
Net cash flow (utilised in)/generated from operating activities (5 644) (10 505) 48 260
INVESTING ACTIVITIES
Property and equipment acquired (3 851) (3 155) (4 323)
Intangible assets acquired and developed (1 003) (1 684) (6 084)
Proceeds on disposal of property and equipment 70 – 68
Net cash outflow on acquisition of subsidiaries 7.1 (129 927) (33 606) (63 877)
Net cash flows utilised in investment activities (134 711) (38 445) (74 216)
FINANCING ACTIVITIES
Proceeds from borrowings 227 478 69 036 132 120
Repayment of borrowings (24 343) (50 551) (135 266)
Repayment of vendor loans – – (439)
Issue of shares for cash – 41 840 41 840
Net cash inflow from financing activities 203 135 60 325 38 255
Net increase in cash resources 62 780 11 375 12 299
Exchange differences on translation 3 841 (57) 756
Cash and cash equivalents at beginning of period 28 972 15 917 15 917
Cash and cash equivalents at end of period 95 593 27 235 28 972
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity Foreign
Other compen- Asset currency
Share Share capital sation revaluation translation Retained Total
capital premium reserves reserve reserve reserve earnings equity
Unaudited R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000
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) 20 133 20 076
Profit for the period – – – – – – 20 133 20 133
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 1 832 117 222 285 489
Balance at 30 June 2015* 13 128 820 26 595 530 3 544 2 419 159 173 321 094
Total comprehensive income
for the period – – – – – 3 841 31 708 35 549
Profit for the period – – – – – – 31 708 31 708
Other comprehensive income
for the period – – – – – 3 841 – 3 841
Share-based payments – – – 3 500 – – – 3 500
Issue of shares for
business combination 1 69 795 (12 861) – – – – 56 935
Dividend paid – – – – – – (14 481) (14 481)
Balance at 31 December 2015 14 198 615 13 734 4 030 3 544 6 260 176 400 402 597
* Restated for measurement period adjustment, refer to note 7.2.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2015 2014 2015
R’000 R’000 R’000
1. FINANCE INCOME
Imputed interest 543 689 1 707
Bank interest 283 241 929
CQS Investment Holdings Proprietary Limited 3 344 – –
Other interest – – 89
Total finance income 4 170 930 2 725
2. FINANCE COSTS
Borrowings 4 512 2 463 4 426
Financial liabilities (imputed) 3 352 3 134 6 821
Total finance cost 7 864 5 597 11 247
3. DIVIDENDS
Ordinary dividend number 13 of 10,90 cents per share was paid to shareholders on 14 September 2015.
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
2015 2014* 2015*
R’000 R’000 R’000
4. GOODWILL
Carrying amount at beginning of period 276 525 133 487 133 487
Acquisition of AspiviaUnison Companies – 143 038 143 038
Acquisition of CQS Investments 250 941 – –
Carrying amount at end of period 527 466 276 525 276 525
Comprising:
Cost 527 466 276 525 276 525
Goodwill is allocated as follows:
– Adapt IT Proprietary Limited 276 525 25 599 25 599
– ApplyIT Proprietary Limited – 59 59
– Swicon360 Proprietary Limited – 12 352 12 352
– Aquilon Companies – 95 477 95 477
– AspiviaUnison Companies – 143 038 143 038
– CQS Investment Holdings Proprietary Limited (CQS Investments) 250 941 – –
Total 527 466 276 525 276 525
* Restated for measurement period adjustment, refer to note 7.2.
On 1 July 2015, ApplyIT Proprietary Limited, Swicon360 Proprietary Limited, Swicon360 HCM Spectrum
Proprietary Limited, ITS Evula Proprietary Limited, Aquilon Proprietary Limited, Aquilon Evolution Holdings
Proprietary Limited, Aquilon Evolution Consulting Proprietary Limited, AspiviaUnison Proprietary Limited,
Unison Communications Holdings Proprietary Limited, Unison Communications Proprietary Limited and
Aspivia Proprietary Limited were amalgamated into Adapt IT Proprietary Limited in accordance with
the provisions of sections 113, 115 and 116 of the Companies Act, 2008, as amended. Accordingly,
the goodwill of ApplyIT Proprietary Limited, Swicon360 Proprietary Limited, Aquilon Companies and
AspiviaUnison Companies were transferred to Adapt IT Proprietary Limited.
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 12% (2014: 11%) (weighted average cost of capital); and
– Projected cash flows for the five years based on a 5% (2014: 5%) growth rate.
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2015 2014 2015
R’000 R’000 R’000
5. INTEREST-BEARING BORROWINGS
Non-current borrowings 237 432 20 273 8 521
– Investec Private Bank Limited 199 611 20 273 8 521
– Sanlam Capital Markets Limited 37 821 – –
Current borrowings 36 448 26 139 15 822
– Investec Private Bank Limited 27 867 13 639 8 740
– Sanlam Capital Markets Limited 8 581 – –
– Chrysalis Capital Fund Proprietary Limited – 12 500 5 000
– Uyandiswa Project Management Services Proprietary Limited – – 2 082
Total 273 880 46 412 24 343
The Investec Private Bank Limited loan was obtained in July 2015. The loan is a 60-month credit facility.
R159,9 million was used to finance the CQS Investment Holdings Proprietary Limited acquisition. The
interest is based on three-month JIBAR. The interest rate during the period ranged between 9,50% and
9,71%. The loan is secured by 100% of the shares held in Adapt IT Proprietary Limited and cession of
book debts held by Adapt IT Holdings Limited and its subsidiaries.
Excess cash resources are used from time to time to reduce the facilities.
CQS Investment Holdings Proprietary Limited has a loan with Sanlam Capital Markets Limited. The
interest is charged at a fixed rate of 9,22% over a five-year loan period. The loan is repayable in variable
bi-annual instalments ending 28 February 2018. The loan is secured by a pledge of issued share
capital, a cession of trade receivables and a notarial bond over all moveable assets of CQS Investment
Holdings Proprietary Limited.
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2015 2014 2015
R’000 R’000 R’000
6. DEFERRED INCOME
Education segment 90 362 76 801 49 828
Manufacturing segment 9 666 17 524 13 741
Energy segment 3 258 2 037 1 486
Financial segment 375 70 232
Total 103 661 96 432 65 287
The Education segment relates to annual maintenance fees invoiced in advance for the year and
usually collected 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.
7. BUSINESS COMBINATIONS
7.1 Acquisition of subsidiary
On 31 December 2015, the Group acquired the entire issued share capital of CQS Investment
Holdings Proprietary Limited (CQS Investments). CQS Investments is South African registered.
With over 20 years in business and approximately 4 000 clients, CQS Investments is a value
added distributor of a combination of its own and third party (being CaseWare, ACL and
Confirmations.com) Intellectual Property software solutions for audit, data analytics, controls
monitoring, risk management and financial reporting to financial professionals, corporates and
the public sector. CQS Investments, which has the reputation of being a leader in this niche
market, also services clients in Nigeria, Kenya, Zambia,Tanzania, Botswana and Zimbabwe through
a direct and a distributor network.
The total purchase consideration of R216,8 million consists of R159,9 million in cash, funded from
borrowings, paid on 14 December 2015 and R56,9 million in shares issued on 18 December 2015.
The fair value of the net liabilities acquired amounted to R80,9 million, resulting in goodwill of
R250,9 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.
The acquisition, which is in line with Adapt IT’s strategy of targeted acquisitive growth,will augment
the Group’s Financial Services and public sector markets’ representation by providing diversification
into the auditing and accounting professions and will enhance its technology diversification.
The fair values of the identifiable net assets and liabilities of CQS Investments as at the date of
acquisition were:
Fair value
recognised
on
acquisition
R’000
Assets
Property and equipment 4 413
Intangible assets 46
Deferred taxation 8 327
Trade and other receivable 35 608
Cash and cash equivalents 29 952
Total assets 78 346
Liabilities
Shareholders’ loan 46 774
Long-term portion of interest-bearing borrowings 37 821
Current portion of interest-bearing borrowings 8 581
Trade and other payables 57 556
Current tax payable 8 514
Total liabilities 159 246
Total identifiable net liabilities (80 900)
Goodwill arising on acquisition 250 941
Fair value of consideration payable 170 041
Fair value of consideration paid:
Cash paid 159 879
Shares issued in December 2015 56 936
Shareholders’ loan acquired (46 774)
Fair value of consideration paid 170 041
Cash outflow on acquisition:
Net cash acquired with the subsidiary 29 952
Cash paid (159 879)
Net cash outflow on acquisition (129 927)
Fair value of the assets acquired approximates their carrying value at the acquisition date.
The initial accounting for this acquisition has been reported on a provisional basis and will only be
finalised in the year ending 30 June 2016.
Acquisition related costs of R2,2 million have been expensed and are included in administrative,
selling and other costs on the statement of profit or loss and other comprehensive income.
7.2 Measurement period adjustment
In the business combination of AspiviaUnison Proprietary Limited, no fair value was placed on
intangible assets as the valuation of these assets had not been completed.
The valuation of these assets, namely Customer Relationship and Internally Generated Software,
has subsequently been finalised. The 31 December 2014 and 30 June 2015 comparative
information have been restated retrospectively in this regard, to increase the value of intangible
assets acquired to R82,6 million, and to increase the related deferred tax liability to R23,1 million,
both offset by a decrease in goodwill of R59,5 million.
The effect on the business combination is as follows:
Measurement
As originally period Restated
reported adjustment amount
R’000 R’000 R’000
Assets
Property and equipment 335 – 335
Intangible assets 33 82 676 82 709
Deferred taxation 381 (381) –
Trade and other receivable 11 620 – 11 620
Cash and cash equivalents 2 394 – 2 394
Total assets 14 763 82 295 97 058
Liabilities
Current portion of non-interest-bearing borrowings
(previous shareholders) 439 – 439
Current portion of interest-bearing borrowings 20 194 – 20 194
Trade and other payables 6 013 – 6 013
Provisions 1 222 – 1 222
Current tax payable 7 057 – 7 057
Deferred tax liability – 22 768 22 768
Total liabilities 34 925 22 768 57 693
Total identifiable net assets (20 162) 59 527 39 365
Goodwill arising on acquisition 202 565 (59 527) 143 038
Fair value of consideration payable: 182 403 – 182 403
Cash paid 36 000 – 36 000
Shares issued in December 2014 48 000 – 48 000
Fair value at acquisition of cash paid on
3 March 2015 34 357 – 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 – 64 046
Fair value of consideration payable 182 403 – 182 403
The effect on 31 December 2014 Group results is as follows:
Condensed consolidated statement of profit or loss and other comprehensive income
As
disclosed Adjustment Restated
R’000 R’000 R’000
Revenue 262 470 – 262 470
Turnover 261 346 – 261 346
Cost of sales (144 267) – (144 267)
Gross profit 117 079 – 117 079
Administrative, selling and other costs (79 371) (2 927) (82 298)
Sundry revenue 194 – 194
Profit from operations 37 902 (2 927) 34 975
Finance income 930 – 930
Finance costs (5 597) – (5 597)
Profit before taxation 33 235 (2 927) 30 308
Income tax expense (10 995) 820 (10 175)
Profit for the period 22 240 (2 107) 20 133
Other comprehensive income (57) – (57)
Exchange differences arising from translation
of foreign operations (57) – (57)
Income tax effect – – –
Total comprehensive income 22 183 (2 107) 20 076
Headline earnings:
Profit attributable to ordinary shareholders 22 240 (2 107) 20 133
Loss on sale of property and equipment 7 – 7
Headline earnings 22 247 (2 107) 20 140
Number of ordinary shares in issue (000) 129 201 129 201 129 201
Weighted average number of ordinary shares in issue 000) 119 731 119 731 119 731
Diluted average number of ordinary shares in issue (000) 119 731 119 731 119 731
Basic earnings per share (cents) 18,57 (1,76) 16,81
Headline earnings per share (cents) 18,58 (1,76) 16,82
Diluted basic earnings per share (cents) 18,57 (1,76) 16,81
Diluted headline earnings per share (cents) 18,58 (1,76) 16,82
Condensed consolidated statement of financial position
As
disclosed Adjustment Restated
R’000 R’000 R’000
ASSETS
Non-current assets 392 420 20 222 412 642
Property and equipment 31 698 – 31 698
Intangible assets 8 612 79 749 88 361
Goodwill 336 052 (59 527) 276 525
Deferred taxation asset 16 058 – 16 058
Current assets 208 111 – 208 111
Trade and other receivables 174 401 – 174 401
Inventory 130 – 130
Current tax receivable 6 345 – 6 345
Cash and cash equivalents 27 235 – 27 235
Total assets 600 531 20 222 620 753
EQUITY AND LIABILITIES
Equity 287 596 (2 107) 285 489
Share capital 13 – 13
Share premium 128 820 – 128 820
Other capital reserves 36 000 – 36 000
Foreign currency translation reserve 1 832 – 1 832
Revaluation reserve 1 602 – 1 602
Retained earnings 119 329 (2 107) 117 222
Non-current liabilities 90 569 22 329 112 898
Interest-bearing borrowings 20 273 – 20 273
Financial liabilities 66 086 – 66 086
Deferred taxation liability 4 210 22 329 26 539
Current liabilities 222 366 – 222 366
Trade and other payables 45 792 – 45 792
Provisions 9 054 – 9 054
Deferred income 96 432 – 96 432
Current tax payable 9 498 – 9 498
Current portion of interest-bearing borrowings 26 139 – 26 139
Financial liabilities 35 451 – 35 451
Total equity and liabilities 600 531 20 222 620 753
The effect on 30 June 2015 Group results is as follows:
Condensed consolidated statement of profit or loss and other comprehensive income
As
disclosed Adjustment Restated
R’000 R’000 R’000
Revenue 578 049 – 578 049
Turnover 575 324 – 575 324
Cost of sales (299 109) – (299 109)
Gross profit 276 215 – 276 215
Administrative, selling and other costs (182 398) (7 317) (189 715)
Sundry revenue – –
Profit from operations 93 817 (7 317) 86 500
Finance income 2 725 – 2 725
Finance costs (11 247) – (11 247)
Share of profits of equity accounted investment after tax 168 – 168
Profit before taxation 85 463 (7 317) 78 146
Income tax expense (27 516) 2 049 (25 467)
Profit for the period 57 947 (5 268) 52 679
Other comprehensive income
Items that will not be reclassified to profit and loss 1 942 – 1 942
Revaluation of land and building 1 407 – 1 407
Income tax effect 535 – 535
Items that may be reclassified subsequently
to profit and loss 530 – 530
Exchange differences arising from translation 530 – 530
of foreign operations
Total comprehensive income 60 419 (5 268) 55 151
Headline earnings:
Profit attributable to ordinary shareholders 57 947 (5 268) 52 679
(Profit)/loss on sale of property and equipment (39) – (39)
Headline earnings 57 908 (5 268) 52 640
Number of ordinary shares in issue (000) 129 201 129 201 129 201
Weighted average number of ordinary shares in issue (000) 124 427 124 427 124 427
Diluted average number of ordinary shares in issue (000) 127 460 127 460 127 460
Basic earnings per share (cents) 46,57 (4,23) 42,34
Headline earnings per share (cents) 46,54 (4,23) 42,31
Diluted basic earnings per share (cents) 45,46 (4,13) 41,33
Diluted headline earnings per share (cents) 45,43 (4,13) 41,30
Condensed consolidated statement of financial position
As
disclosed Adjustment Restated
R’000 R’000 R’000
ASSETS
Non-current assets 392 215 15 832 408 047
Property and equipment 31 706 – 31 706
Intangible assets 10 873 75 359 86 232
Goodwill 336 052 (59 527) 276 525
Equity accounted investment 168 – 168
Deferred taxation asset 13 416 – 13 416
Current assets 153 804 – 153 804
Trade and other receivables 112 112 – 112 112
Current tax receivable 12 720 – 12 720
Cash and cash equivalents 28 972 – 28 972
Total assets 546 019 15 832 561 851
EQUITY AND LIABILITIES
Equity 326 362 (5 268) 321 094
Share capital 13 – 13
Share premium 128 820 – 128 820
Other capital reserves 26 595 – 26 595
Equity compensation reserve 530 – 530
Foreign currency translation reserve 2 419 – 2 419
Revaluation reserve 3 544 – 3 544
Retained earnings 164 441 (5 268) 159 173
Non-current liabilities 77 848 21 100 98 948
Interest-bearing borrowings 8 521 – 8 521
Financial liabilities 69 224 – 69 224
Deferred taxation liability 103 21 100 21 203
Current liabilities 141 809 – 141 809
Trade and other payables 33 615 – 33 615
Provisions 26 466 – 26 466
Deferred income 65 287 – 65 287
Current tax payable 619 – 619
Current portion of interest-bearing borrowings 15 822 – 15 822
Total equity and liabilities 546 019 15 832 561 851
8. 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 2015 and 31 December 2014, 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 2015
Turnover 87 753 112 533 42 725 67 427 – 310 438
Segment profit
from operations 15 032 16 456 6 004 18 479 (3 462) 52 509
Operating profit margin (%) 17 15 14 27 – 17
Six months ended
31 December 2014*
Turnover 71 743 89 755 47 940 51 908 – 261 346
Segment profit
from operations 12 052 11 547 6 581 11 593 (6 798) 34 975
Operating profit margin (%) 17 13 14 22 – 13
The following table presents segment assets and liabilities of the Group’s operating segments as at
31 December 2015 and 31 December 2014, 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 2015
Total assets 170 244 290 930 380 824 158 234 3 516 1 003 748
Total liabilities 130 306 104 987 120 006 15 268 230 584 601 151
Six months ended
31 December 2014*
Total assets 142 208 216 564 129 653 129 717 2 612 620 754
Total liabilities 102 052 167 102 22 095 9 180 34 836 335 265
* Restated for measurement period adjustment, refer to note 7.2.
CORPORATE INFORMATION
ADAPT IT HOLDINGS LIMITED TRANSFER SECRETARY
Incorporated in the Republic of South Africa Computershare Investor Services (Pty) Ltd
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
AUDITORS
COMPANY SECRETARY Deloitte & Touche
Statucor (Pty) Ltd
22 Wellington Road SPONSOR
Parktown Merchantec Capital
2193 2nd Floor, North Wing
Hyde Park Corner Office Suites
REGISTERED OFFICE Corner 6th Road and Jan Smuts Avenue
5 Rydall Vale Office Park Hyde Park
Rydall Vale Crescent Johannesburg
La Lucia Ridge 2196
4019
KwaZulu-Natal CORPORATE BANKERS
South Africa The Standard Bank of South Africa Limited
ABSA Bank
DIRECTORS
Craig Chambers* (Chairman) LEGAL REPRESENTATIVES
Sbu Shabalala (Chief Executive Officer) Shepstone & Wylie
Tiffany Dunsdon (Financial Director) Read Hope Phillips Thomas Cadman Incorporated
Bongiwe Ntuli* Garlicke & Bousfield
Catherine Koffman*
Oliver Fortuin* ADAPT IT WEBSITE
* Independent non-executive director www.adaptit.co.za
REGIONAL OFFICES
DURBAN JOHANNESBURG PRETORIA CAPE TOWN
5 Rydall Vale Office Park (Bryanston Office) (Illovo Office) 50 Bushbuck Lane Great Westerford
Rydall Vale Crescent The Braes The Oval Monument Park 3rd Floor
La Lucia Ridge Adapt IT House West Block Ground Floor 0181 240 Main Road
4019 I93 Bryanston Drive Wanderers Office Park Pretoria Rondebosch
KwaZulu-Natal Bryanston 52 Corlett Drive, Illovo Cape Town
Johannesburg Johannesburg
T +27 (0) 31 514 7300 T +27 (0) 11 460 5300 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) 11 460 5301 F +27 (0) 12 460 5377
www.adaptit.co.za
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