ADAPT IT HOLDINGS LIMITED - Preliminary Summarised Consolidated Audited Results, Final Dividend Declaration and Notice of AGM

Release Date: 16/08/2018 13:38
Code(s): ADI
 
Wrap Text
Preliminary Summarised Consolidated Audited Results, Final Dividend Declaration and Notice of AGM

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 AND COMPANY AUDITED RESULTS
FOR THE YEAR ENDED 30 JUNE 2018

FINAL DIVIDEND DECLARATION AND NOTICE OF ANNUAL GENERAL MEETING

UP 36% TURNOVER
UP 39% EBITDA
UP 32% BASIC EARNINGS PER SHARE
UP 14% HEADLINE EARNINGS PER SHARE
UP 11% NORMALISED HEADLINE EARNINGS PER SHARE

SUMMARISED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018

                                                                                 Group           Group       Company       Company   
                                                                                  2018            2017          2018          2017   
                                                                                     R               R             R             R   
Revenue                                                                  1 353 896 440     996 425 164    25 735 304    23 134 544   
Turnover                                                                 1 348 403 468     993 671 344             -             -   
Cost of sales                                                            (533 123 742)   (420 420 024)             -             -   
Gross profit                                                               815 279 726     573 251 320             -             -   
Administrative, selling and other costs                                  (623 426 024)   (422 268 011)   (3 485 175)   (3 106 526)  
Other income                                                                26 350 922               -             -             - 
Sundry revenue                                                                       -               -     3 500 000     3 500 000   
Profit from operations                                                     218 204 624     150 983 309        14 825       393 474   
Dividend received                                                                    -               -    21 993 947    19 633 931   
Finance income                                                               5 492 972       2 753 820       241 357           613   
Finance costs                                                             (28 559 603)    (25 605 200)             -             -   
Share of loss of equity accounted investment after tax                               -        (88 103)             -             -   
Profit before taxation                                                     195 137 993     128 043 826    22 250 129    20 028 018   
Income tax expense                                                        (65 526 402)    (35 497 923)      (34 513)      (67 262)   
Profit for the year                                                        129 611 591      92 545 903    22 215 616    19 960 756   
Attributable to:                                                                                                                     
Equity holders of the parent                                               122 020 035      88 133 237    22 215 616    19 960 756   
Non-controlling interests                                                    7 591 556       4 412 666             -             -   
Other comprehensive income/(loss)                                                                                                    
Items that will not be reclassified to profit and loss                     (2 750 454)               -             -             -   
Devaluation of land and building                                           (3 544 400)               -             -             -   
Income tax effect                                                              793 946               -             -             -   
Items that may be reclassified subsequently to profit and loss                 533 692       (437 553)             -             -   
Exchange gain/(loss) arising from translation of foreign operations            533 692       (437 553)             -             -   
Total comprehensive income                                                 127 394 829      92 108 350    22 215 616    19 960 756   
Attributable to:                                                                                                                     
Equity holders of the parent                                               119 803 273      87 695 684    22 215 616    19 960 756   
Non-controlling interests                                                    7 591 556       4 412 666             -             -   
Basic earnings per share                                   (cents)               77,51           58,74             -             -   
Basic diluted earnings per share                           (cents)               77,51           58,74             -             -   

SUMMARISED STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2018

                                                                                Group           Group        Company       Company
                                                                                 2018            2017           2018          2017
                                                                                    R               R              R             R
ASSETS
Non-current assets                                                        974 153 583     730 781 287     92 837 242    49 543 493
Property and equipment                                                     96 241 640      35 285 087              -             -
Intangible assets                                                         239 365 393     180 875 370              -             -
Goodwill                                                                  571 931 924     500 346 685              -             -
Interest in subsidiaries and share trust                                            -               -     71 099 241    49 511 335
Loans to subsidiaries                                                               -               -     21 672 542        32 158
Finance lease receivables                                                  23 666 262               -              -             -
Loans receivable                                                           15 288 798               -              -             -
Deferred taxation asset                                                    27 659 566      14 274 145         65 459             -
Current assets                                                            413 361 377     355 666 131    310 213 742   300 609 100
Inventories                                                                21 994 177               -              -             -
Trade and other receivables                                               272 691 888     228 362 544        212 804     2 277 675
Amounts owing by subsidiaries                                                       -               -    309 607 769   297 962 752
Current tax receivable                                                      1 632 675      12 288 985         99 395        86 770
Finance lease receivables                                                  10 986 946               -              -             -
Loans receivable                                                            4 096 044               -              -             -
Cash and cash equivalents                                                  86 397 659      98 048 710        293 774       281 903
Assets classified as held for sale                                         15 561 988      16 965 892              -             -
Total assets                                                            1 387 514 960   1 086 447 418    403 050 984   350 152 593
EQUITY AND LIABILITIES
Equity
Share capital                                                                  16 054          15 360         16 054        15 360
Treasury shares                                                                 (819)               -              -             -
Share premium                                                             340 277 986     336 225 816    400 647 135   331 510 804
Other capital reserves                                                              -      17 154 720              -    17 154 720
Equity compensation reserve                                                19 221 006      14 585 430              -             -
Foreign currency translation reserve                                        3 304 659       2 770 967              -             -
Revaluation reserve                                                                 -       3 544 400              -             -
Retained earnings                                                         388 101 858     287 281 824      1 134 074       912 405
Equity attributable to shareholders of the company                        750 920 744     661 578 517    401 797 263   349 593 289
Non-controlling interests                                                   2 283 174       6 958 535              -             -
Total equity                                                              753 203 918     668 537 052    401 797 263   349 593 289
Non-current liabilities                                                   287 750 540     193 177 743              -        32 030
Interest-bearing borrowings                                               200 794 458     101 486 667              -             -
Financial liabilities                                                      33 479 340      43 814 766              -             -
Finance lease liabilities                                                   1 670 033               -              -             -
Deferred taxation liability                                                51 806 709      47 876 310              -        32 030
Current liabilities                                                       346 560 502     224 732 623      1 253 721       527 274
Trade and other payables                                                  133 859 490     110 667 792      1 253 721       527 274
Provisions                                                                 51 841 262      24 921 276              -             -
Deferred income                                                           105 458 045      71 222 047              -             -
Current tax payable                                                         1 453 331       1 762 369              -             -
Financial liabilities                                                      38 951 795      14 197 783              -             -
Current portion of interest-bearing borrowings                             13 680 725         580 894              -             -
Finance lease liabilities                                                   1 315 854               -              -             -
Non-interest-bearing borrowings                                                     -       1 380 462              -             -
Total equity and liabilities                                            1 387 514 960   1 086 447 418    403 050 984   350 152 593

At 30 June 2018, the carrying values of the financial assets and financial liabilities are considered by management to approximate their fair value.
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 2018

                                                                              Group           Group        Company         Company   
                                                                               2018            2017           2018            2017   
                                                                                  R               R              R               R   
OPERATING ACTIVITIES                                                                                                                 
Cash generated from operations                                          257 709 547     139 325 456      2 806 143     (2 117 820)   
Finance income                                                            3 957 779       1 600 672        241 357             613   
Finance costs                                                          (23 403 322)    (16 248 874)              -               -   
Dividends received                                                                -               -     21 993 947      19 633 931   
Dividends paid                                                         (34 970 537)    (23 359 331)   (21 993 947)    (19 633 931)   
Taxation paid                                                          (68 951 177)    (42 102 157)      (144 627)        (67 010)   
Net cash flow from/(utilised in) operating activities                   134 342 290      59 215 766      2 902 873     (2 184 217)   
INVESTING ACTIVITIES                                                                                                                 
Property and equipment acquired                                        (90 683 597)     (6 681 043)              -               -   
Intangible assets acquired and developed                                (9 033 738)     (4 913 201)              -               -   
Proceeds on disposal of property and equipment                            2 065 746         129 098              -               -   
Proceeds from loans receivable                                            5 752 936               -              -               -   
Payments to acquire financial assets                                    (2 160 186)               -              -               -   
Settlement of contingent purchase consideration                        (22 390 664)    (48 000 003)              -               -   
Net cash outflow on acquisition of subsidiaries                       (108 734 438)        (21 696)              -               -   
Proceeds from disposal of subsidiary                                     42 027 110               -              -               -   
Increase in investment in subsidiary                                              -               -   (21 587 906)               -   
Net cash utilised in investment activities                            (183 156 831)    (59 486 845)   (21 587 906)               -   
FINANCING ACTIVITIES                                                                                                                 
Proceeds from borrowings                                                323 000 000     313 500 041              -               -   
Repayment of borrowings                                               (242 822 697)   (376 596 812)              -               -   
Proceeds from finance lease                                                 285 291               -              -               -   
Share repurchases                                                      (72 666 348)               -              -               -   
Issue of shares for cash                                                 35 297 437      83 999 979              -               -   
Issue of company's shares                                                         -               -     69 137 025     133 999 970   
Increase in amounts owing by subsidiaries                                         -               -   (50 440 121)   (131 663 293)   
Repayment of vendor loans                                               (6 723 864)               -              -               -   
Net cash flows from financing activities                                 36 369 819      20 903 208     18 696 904       2 336 677   
Net (decrease)/increase in cash resources                              (12 444 722)      20 632 129         11 871         152 460   
Exchange gain/(loss) on translation                                         793 671       (307 787)              -               -   
Cash and cash equivalents at beginning of year                           98 048 710      77 724 368        281 903         129 443   
Cash and cash equivalents at end of year                                 86 397 659      98 048 710        293 774         281 903   

SUMMARISED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018

                                                                     Attributable to equity holders of the parent
                                                                                                            Foreign                Attributable
                                                                      Other        Equity        Asset     currency                   to equity         Non-
                                Share  Treasury         Share       capital  compensation  revaluation  translation      Retained    holders of  controlling
                              capital    shares       premium      reserves       reserve      reserve      reserve      earnings    the parent    interests          Total
                                    R         R             R             R             R            R            R             R             R            R              R
GROUP
Balance at 30 June 2016        14 006         -   200 831 266    34 574 504     5 724 817    3 544 400    3 208 520   218 782 518   466 680 031    6 007 925    472 687 956
Total comprehensive income
for the year                        -         -             -             -             -            -    (437 553)    88 133 237    87 695 684    4 412 666     92 108 350
Profit for the year                 -         -             -             -             -            -            -    88 133 237    88 133 237    4 412 666     92 545 903
Other comprehensive loss for 
the year                            -         -             -             -             -            -    (437 553)             -     (437 553)            -      (437 553)
Share-based payments                -         -             -             -    10 256 547            -            -             -    10 256 547            -     10 256 547
Issue of shares for business
combination                       765         -    49 999 226  (34 574 504)             -            -            -             -    15 425 487            -     15 425 487
Shares issued during the year     589         -    85 395 324             -   (1 395 934)            -            -             -    83 999 979      263 344     84 263 323
Shares to be issued                 -         -             -    17 154 720             -            -            -             -    17 154 720            -     17 154 720
Dividend paid                       -         -             -             -             -            -            -  (19 633 931)  (19 633 931)  (3 725 400)   (23 359 331)
Balance at 30 June 2017        15 360         -   336 225 816    17 154 720    14 585 430    3 544 400    2 770 967   287 281 824   661 578 517    6 958 535    668 537 052
Total comprehensive income
for the year                        -         -             -             -             -  (3 544 400)      533 692   122 813 981   119 803 273    7 591 556    127 394 829
Profit for the year                 -         -             -             -             -            -            -   122 020 035   122 020 035    7 591 556    129 611 591
Other comprehensive income
for the year                        -         -             -             -             -  (3 544 400)      533 692       793 946   (2 216 762)            -    (2 216 762)
Share-based payments                -         -             -             -     4 823 482            -            -             -     4 823 482            -      4 823 482
Net repurchase of shares            -     (927)  (72 665 420)             -             -            -            -             -  (72 666 347)            -   (72 666 347)
Issue of treasury shares            -       108     7 581 259   (7 581 367)             -            -            -             -             -            -              -
Settled in cash                     -         -             -   (9 573 353)             -            -            -             -   (9 573 353)            -    (9 573 353)
Issue of shares for business
combination                       337         -    33 651 345             -             -            -            -             -    33 651 682            -     33 651 682
Shares issued during the year     357         -    35 484 986             -     (187 906)            -            -             -    35 297 437            -     35 297 437
Non-controling interest 
disposed                            -         -             -             -             -            -            -             -             -      709 673        709 673
Dividends paid                      -         -             -             -             -            -            -  (21 993 947)  (21 993 947) (12 976 590)   (34 970 537)
Balance at 30 June 2018        16 054     (819)   340 277 986             -    19 221 006            -    3 304 659   388 101 858   750 920 744    2 283 174    753 203 918

                                                                                                 Other
                                                                    Share          Share       capital      Retained         Total
                                                                  capital        premium      reserves      earnings        equity
                                                                        R              R             R             R             R
COMPANY
Balance at 30 June 2016                                            14 006    196 116 254    34 574 504       585 580   231 290 344
Total comprehensive income for the year                                 -              -             -    19 960 756    19 960 756
Issue of shares                                                     1 354    135 394 550  (34 574 504)             -   100 821 400
Shares to be issued                                                     -              -    17 154 720             -    17 154 720
Dividend paid                                                           -              -             -  (19 633 931)  (19 633 931)
Balance at 30 June 2017                                            15 360    331 510 804    17 154 720       912 405   349 593 289
Total comprehensive profit for the year                                 -              -             -    22 215 616    22 215 616
Issue of shares                                                       694     69 136 331             -             -    69 137 025
Shares issued through treasury shares and cash                          -              -  (17 154 720)             -  (17 154 720)
Dividend paid                                                           -              -             -  (21 993 947)  (21 993 947)
Balance at 30 June 2018                                            16 054    400 647 135             -     1 134 074   401 797 263

EARNINGS AND DIVIDENDS PER SHARE

EARNINGS PER SHARE

The calculation of earnings per share is based on the profit attributable to equity holders of R122 020 035 (2017: R88 133 237) and the weighted
average number of ordinary shares in issue during the year of 157 415 107 (2017: 150 028 042). The calculation of diluted earnings per share is
based on the profit of R122 020 035 (2017: R88 133 237) and the weighted average number of diluted ordinary shares in issue during the year
of 157 415 107 (2017: 150 045 972).

                                                                                                              Group          Group
                                                                                                               2018           2017
                                                                                                                  R              R
Reconciliation between earnings, headline earnings and normalised headline earnings
Earnings attributable to equity holders of the parent                                                   122 020 035     88 133 237
Adjusted for:
- Loss on sale of property and equipment                                                                    473 160         16 276
- Scrapping of property and equipment                                                                       385 239              -
- Profit after tax on sale of businesses                                                               (17 452 763)              -
Headline earnings                                                                                       105 425 671     88 149 513
Adjusted for:
Amortisation of intangible assets acquired                                                               33 895 406     29 105 008
Deferred taxation on amortisation of intangible assets acquired                                         (9 490 714)    (8 149 402)
Fair value adjustment to financial liability (imputed interest)                                           5 156 281      9 356 326
Fair value adjustment to financial liability (Micros underpin)                                            2 891 886              -
Normalised headline earnings                                                                            137 878 530    118 461 445
Basic earnings per share                                                                      (cents)         77,51          58,74
Headline earnings per share                                                                   (cents)         66,97          58,76
Diluted basic earnings per share                                                              (cents)         77,51          58,74
Diluted headline earnings per share                                                           (cents)         66,97          58,75
Normalised headline earnings                                                                  (cents)         87,59          78,96

Normalised headline earnings are calculated by adding back to headline earnings the amortisation of
intangible assets net of deferred taxation, as a consequence of the purchase price allocations completed
in terms of IFRS 3 - Business Combinations and fair value adjustments to financial liabilities on contingent
purchase considerations.
DIVIDENDS PER SHARE
Dividends per share                                                                           (cents)         13,70          13,40

EVENTS AFTER THE REPORTING DATE

On 1 July 2018, Cash Bases South Africa (Pty) Ltd merged with Adapt IT (Pty) Ltd to achieve efficiencies and savings in administrative and
operational expenditure.

No other significant transactions or events have occurred between year-end date and the date of this report.

BUSINESS COMBINATIONS

ACQUISITION OF SUBSIDIARY

On 1 July 2017, the group acquired the entire issued share capital of Micros South Africa (Pty) Ltd (Micros), a South African registered company.

Micros conducts business in the Information Technology sector, inter alia, providing software, hardware, enterprise systems integration,
consulting, support and solutions to its clients, primarily in the Hospitality industry.

The acquisition of Micros, which is a leader in its vertical market, created an entry into the Hospitality industry, a new vertical for the group,
further diversifying the group.

The purchase consideration of R134 950 940 consists of R88 889 787 in cash, paid on 19 July 2017, R33 651 703 in shares issued on 31 July 2017,
and R12 409 450 fair value of cash top-up payment.

Adapt IT agreed to provide the Micros sellers, where shares have been issued, with a one-year protection on any decrease in the value of the
shares in Adapt IT Holdings Limited on the basis that Adapt IT will become obliged to make a cash top-up payment to the applicable sellers to
place them in a similar position had they in fact been cash-settled at July 2017 in respect of their entire proceeds. In July 2017, the fair value of
the share value underpin was calculated at R12 409 450.

The fair value of the net assets acquired amounted to R56 903 617, resulting in goodwill of R78 047 323 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 fair values of the identifiable net assets and liabilities of Micros as at the date of acquisition were:

                                                                                                                        Fair value
                                                                                                                     recognised on
                                                                                                                       acquisition
                                                                                                                             R'000   
Assets                                                                                                                               
Property and equipment                                                                                                   9 954 571   
Intangible assets                                                                                                       46 110 344   
Finance lease receivables                                                                                               36 813 394   
Inventories                                                                                                             27 989 315   
Trade and other receivables                                                                                             40 701 225   
Cash and cash equivalents                                                                                               22 955 370   
Total assets                                                                                                           184 524 219   
Liabilities                                                                                                                          
Interest-bearing borrowings                                                                                             32 230 319   
Finance lease liabilities                                                                                                2 700 596   
Deferred tax liability                                                                                                   7 892 784   
Amounts due to vendors                                                                                                   6 723 864   
Trade and other payables                                                                                                76 378 177   
Current tax payable                                                                                                      1 694 862   
Total liabilities                                                                                                      127 620 602   
Total identifiable net assets                                                                                           56 903 617   
Goodwill arising on acquisition                                                                                         78 047 323   
Fair value of consideration payable                                                                                    134 950 940   

                                                                                                                        Fair value
                                                                                                                     recognised on
                                                                                                                       acquisition 
                                                                                                                             R'000   
Fair value of consideration payable                                                                                                  
Cash paid                                                                                                               29 575 656   
Cash advanced to Micros in July 2017                                                                                    59 314 152   
Shares issued in July 2017                                                                                              33 651 682   
Fair value of share value underpin                                                                                      12 409 450   
Fair value of consideration payable                                                                                    134 950 940   
Cash outflow on acquisition                                                                                                          
Net cash acquired with the subsidiary                                                                                   22 955 370   
Cash paid                                                                                                             (88 889 808)   
Net cash outflow on acquisition                                                                                       (65 934 438)   

From the date of acquisition, Micros has contributed R17 952 100 to the profit after tax of the group. Non-cash acquisition related expenses
(amortisation of intangible assets) amounted to R3 235 918.

Cash acquisition related costs of R1 553 395 have been expensed and are included in operational expenses on the statement of profit or loss
and other comprehensive income.

ACQUISITION OF SUBSIDIARY

On 1 June 2018, the group acquired the business of CDR Live Limited (Mauritius registered), the issued share capital in its wholly-owned
subsidiary, LGR Analytics (USA registered), and the businesses of its wholly-owned subsidiaries, LGR Telecommunications (Pty) Ltd (South African
registered) and LGR Telecommunications (Pty) Ltd (Australia registered) (collectively LGR).

LGR is a specialist solutions provider with an exclusive focus on the global Telecommunications industry. With a track record spanning over
18 years, LGR has built a reputation for the provision and management of end-to-end data warehouse and business intelligence systems at
leading international operators.

The purchase consideration consists of R42 800 000 paid in cash on 11 June 2018, and a further R8 158 751 due in cash in September 2018.

The fair value of the net assets acquired amounted to R47 982 971, resulting in goodwill of R2 975 780 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 fair values of the identifiable net assets and liabilities of LGR as at the date of acquisition were:

                                                                                                                        Fair value   
                                                                                                                     recognised on   
                                                                                                                       acquisition   
                                                                                                                             R'000   
Assets                                                                                                                               
Property and equipment                                                                                                     561 359   
Intangible assets                                                                                                       48 130 538   
Trade and other receivables                                                                                              8 966 464   
Total assets                                                                                                            57 658 361   
Liabilities                                                                                                                          
Deferred tax liability                                                                                                     119 450   
Trade and other payables                                                                                                 9 555 940   
Total liabilities                                                                                                        9 675 390   
Total identifiable net assets                                                                                           47 982 971   
Goodwill arising on acquisition                                                                                          2 975 780   
Fair value of consideration payable                                                                                     50 958 751   
Fair value of consideration payable                                                                                                  
Cash paid                                                                                                               42 800 000   
Fair value of contingent purchase consideration owing in respect of acquisition                                          8 158 751   
Fair value of consideration payable                                                                                     50 958 751   
Cash outflow on acquisition                                                                                                          
Cash paid                                                                                                             (42 800 000)   
Net cash outflow on acquisition                                                                                       (42 800 000)   

The acquisition is provisionally accounted for in terms of the allowance per IFRS 3 Business Combinations.

From the date of acquisition, LGR has contributed R867 833 to the profit after tax of the group. Non-cash acquisition related expenses (amortisation
of intangible assets) amounted to R54 428.

Cash acquisition related costs of R1 417 173 have been expensed and are included in operational expenses on the statement of profit or loss
and other comprehensive income.

DISPOSAL OF A SUBSIDIARY

On 31 May 2018, CQS GRC Solutions (Pty) Ltd disposed of certain assets and liabilities, for a consideration of R20 472 195.

                                                                                                                        Fair value   
                                                                                                                       on disposal   
                                                                                                                             R'000   
The fair values of net assets and liabilities disposed:                                                                              
Assets                                                                                                                               
Property and equipment                                                                                                 (5 039 417)   
Goodwill                                                                                                               (8 057 403)   
Trade and other receivables                                                                                           (11 692 126)   
Total assets                                                                                                          (24 788 946)   
Liabilities                                                                                                                          
Trade and other payables                                                                                              (11 529 541)   
Total liabilities                                                                                                     (11 529 541)   
Total identifiable net assets disposed of                                                                             (13 259 405)   
Cash received on 31 May 2018                                                                                            20 472 195   
Profit on disposal                                                                                                       7 212 790   
On 1 June 2018, the group disposed of its share in CQS GRC Solutions (Pty) Ltd, for a consideration of R22 786 443.                  
The fair values of net assets and liabilities over which control was lost:                                                           
Assets                                                                                                                               
Intangible assets                                                                                                      (6 887 811)   
Cash and cash equivalents                                                                                              (1 231 528)   
Total assets                                                                                                           (8 119 339)   
Liabilities                                                                                                                          
Deferred tax liabilities                                                                                               (1 928 587)   
Other payables                                                                                                           (507 686)   
Current tax payable                                                                                                    (2 660 320)   
Total liabilities                                                                                                      (5 096 593)   
Total identifiable net assets disposed of                                                                              (3 022 746)   
Non-controlling interest                                                                                                 (709 673)   
Cash received on 1 June 2018                                                                                            22 786 443   
Profit on disposal                                                                                                      19 054 024   
Cash inflow on disposal                                                                                                              
Net cash disposed with the subsidiary                                                                                  (1 231 528)   
Cash received                                                                                                           22 786 443   
Net cash inflow on disposal                                                                                             21 554 915   

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.

Management does not monitor assets and liabilities by segment.

The following tables present turnover and EBITDA information (after Shared Services cost allocation) regarding the group's operating segments
for the year ended 30 June 2018 and 30 June 2017 respectively:

                                                               Financial
                         Education   Manufacturing***           Services        Energy   Hospitality         Other           Total
                                 R                  R                  R             R             R             R               R   
2018                                                                                                                                 
Turnover               177 732 748        373 022 527        332 148 564   175 259 263   290 240 366             -   1 348 403 468   
Segment EBITDA          31 766 389         92 526 573         55 698 553    35 761 021    35 140 050    19 209 559     270 102 145   
EBITDA margin    (%)            18                 25                 17            20            12                            20   
2017                                                                                                                                 
Turnover               170 741 995        284 977 932        350 040 062   187 911 355             -             -     993 671 344   
Segment EBITDA          29 707 360         70 573 209         53 401 161    44 113 327             -   (3 469 049)     194 326 008   
EBITDA margin    (%)            17                 25                 15            23                                          20   

The following table presents turnover by geographic area of the group's operating segments as at 30 June 2018 and 30 June 2017:

                                                                     Financial
                               Education   Manufacturing***           Services        Energy   Hospitality   Other           Total  
                                       R                  R                  R             R             R       R               R   
2018                                                                                                                                 
Turnover from
external customers
by geographic area*          177 732 748        373 022 527        332 148 564   175 259 263   290 240 366       -   1 348 403 468   
South Africa                 119 288 168        300 100 602        252 718 416   159 922 560   265 900 648       -   1 097 930 394   
African Countries**           29 141 059         54 608 362         61 290 540       259 658    24 154 763       -     169 454 382   
United Kingdom                         -                  -            119 221             -             -       -         119 221   
Europe                         8 136 541             15 712             71 172     1 857 845       167 875       -      10 249 145   
Asia                                   -          2 219 098                  -     3 545 679         1 080       -       5 765 857   
North America                          -            913 199         17 932 429     7 032 152        16 000       -      25 893 780   
South America                          -                  -                  -     2 256 824             -       -       2 256 824   
Australasia                   21 166 980         15 165 554             16 786       384 545             -       -      36 733 865   
2017                                                                                                                                 
Turnover from
external customers
by geographic area*          170 741 995        284 977 932        350 040 062   187 911 355             -       -     993 671 344   
South Africa                 115 308 856        231 715 589        277 355 595   135 502 240             -       -     759 882 280   
African Countries**           23 995 859         37 720 685         56 954 964    19 724 109             -       -     138 395 617   
United Kingdom                         -                  -                  -       671 677             -       -         671 677   
Europe                         6 679 111            231 750            363 129     4 033 605             -       -      11 307 595   
Asia                                   -                  -                  -     5 020 413             -       -       5 020 413   
North America                          -          1 217 114         15 366 374    15 569 779             -       -      32 153 267   
South America                          -                  -                  -     7 364 899             -       -       7 364 899   
Australasia                   24 758 169         14 092 794                  -        24 633             -       -      38 875 596   

*    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, Rwanda, Uganda, Cameroon, Senegal, Ethiopia, Benin, Gambia, Egypt, Gabon, Angola, Guinea, Togo, Liberia, Tunisia, C�te d'Ivoire and South Sudan.
***  The manufacturing segment includes Communications, and SAP HCM Cloud Services.

COMMENTARY

BASIS OF PREPARATION

The accounting policies and methods of computation applied in the preparation of these preliminary summarised consolidated and
company 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 and company annual financial statements
for the year ended 30 June 2017. All amendments to IFRS adopted in the current year were considered insignificant to the annual
financial statements. These preliminary summarised consolidated and company audited financial statements as set out in this report
have been prepared in accordance with the framework concepts and the measurement and recognition requirements of IFRS and
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
the Financial Reporting Standards Council, and, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.
The consolidated and company annual financial statements and the summarised consolidated and company financial statements have been
prepared under the historical cost method, except for certain financial instruments initially measured at fair value and property measured at fair
value. The consolidated and company annual financial statements and the summarised consolidated and company financial statements have
been prepared on the going-concern basis and have been prepared under the supervision of Ms Nombali Mbambo CA(SA), the Chief Financial Officer.

These preliminary summarised consolidated and company audited financial statements, which have been derived from the consolidated and
company 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 and company annual financial statements and on the preliminary summarised consolidated
and company audited financial statements (ISA 810) together with the accompanying financial information 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 report and
that the financial information has been correctly extracted from the underlying consolidated and company audited annual financial statements,
which is available for inspection at the registered office of the company.

AUDIT REPORT

The auditor's report on the summarised consolidated and company financial statements 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 REVIEW

Turnover for the year ended 30 June 2018 increased 36% to R1,348 billion (2017: R993,7 million), organic growth from continuing operations
being 13% and acquisitive growth was 30%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 39% to R270,1 million (2017: R194,3 million). Profit attributable to
equity shareholders grew 38% to R122,0 million (2017: R88,1 million).

Basic earnings per share increased 32% to 77,51 cents (2017: 58,74 cents) and headline earnings per share improved by 14% to 66,97 cents from
58,76 cents.

The acquisitive growth contribution of 30% comprised mainly of the Micros South Africa hospitality group acquisition, which was consolidated
with effect from 1 July 2017. Micros has a talented team of over 300 employees providing world-class solutions for the hospitality industry.
The Hospitality division supports business critical processes through providing best-of-breed software solutions to 4 200 hotel, retail and food
and beverage outlets in 18 countries.

Adapt IT also acquired the LGR group with effect from 1 June 2018. LGR is a specialist solutions provider with an exclusive focus on the global
Telecommunications industry providing and managing end-to-end data warehouse and business intelligence systems at leading international
operators, bolstering the Communications product offering.

Adapt IT received and accepted an offer to purchase its shares in CQS GRC Solutions (Pty) Ltd (CQS GRC). The transaction was concluded through
a sale of certain CQS GRC assets and liabilities, for a consideration of R20,5 million on 31 May 2018, and Adapt IT disposing of its share in CQS
GRC on 1 June 2018, for a consideration of R22,8 million. The CQS GRC disposals resulted in the group recognising a profit on disposal net of tax
amounting to R17,6 million.

SHARE REPURCHASE

Adapt IT initiated a share buyback programme to take advantage of the Adapt IT Holdings Limited (ADI) share recently having been undervalued.
Since 1 July 2017, Adapt IT repurchased 9,3 million shares, or 5.8% of the issued shares, at a weighted average price of 784 cents per share,
utilising cash of R73 million. 1,1 million of the shares repurchased were issued as consideration for the EasyRoster acquisition, with the remainder
of the shares held as treasury shares.

APPRECIATION

Sincere thanks to our customers for entrusting us with key aspects of their businesses, where we strive to add long term sustainable business
value. The Board thanks every member of the Adapt IT team for their part in what we have achieved and their commitment to pursue the goals
we have set for the business.

CHANGES TO THE BOARD DURING THE YEAR UNDER REVIEW

There were no changes to the composition of the Board since the last report.

DIVIDENDS: ORDINARY DIVIDEND NUMBER 16

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 gross cash
dividend of 17,10 cents per share (the dividend) has been declared for the year ended 30 June 2018, payable to shareholders recorded in the
books of the company at close of business on 21 September 2018.

In terms of the Listings Requirements of the JSE Limited 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 20%; and
-  The DT to be withheld by the company amounts to 3,42 cents per share.
-  Therefore, the net dividend payable to shareholders who are not exempt from DT is 13,68 cents per share, while the gross dividend of 17,10
   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 160 539 761 ordinary shares including 8 189 244 treasury shares held
   by the company's subsidiary, Adapt IT (Pty) Ltd. The issued share capital, excluding treasury shares, at the declaration date is 152 350 517;
-  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 Tuesday, 18 September 2018. Shares will trade ex-dividend as from
Wednesday, 19 September 2018, and the record date will be Friday, 21 September 2018. Payment will be made on Tuesday, 25 September 2018.
Share certificates may not be dematerialised or rematerialised during the period Wednesday, 19 September 2018 to Friday, 21 September 2018,
both days inclusive. This dividend, having been declared after 30 June 2018, has not been provided for in the financial statements for the year
ended 30 June 2018.

NOTICE OF THE ANNUAL GENERAL MEETING AND POSTING OF INTEGRATED ANNUAL REPORT

The integrated annual report will be mailed to shareholders on 31 August 2018 and is available on the group's website: http://www.adaptit.co.za from
16 August 2018.

Notice is hereby given that the 19th annual general meeting of the shareholders of Adapt IT will be held on Friday, 23 November 2018 at 09:00
at the company's office situated at No. 152, 14th Road, Midrand, Johannesburg.

The Board has determined that, in terms of section 62(3)(a), as read with section 59 of the Companies Act, No 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,
16 November 2018. Accordingly, the last date to trade in order to be registered in the register of shareholders of the company and therefore be
eligible to participate in and vote at the annual general meeting is Tuesday, 13 November 2018.

OUTLOOK

In the 2019 financial year, Adapt IT will continue to position itself for growth in targeted sectors by accelerating organic growth through further
innovation whilst supplementing same with an acquisition strategy targeted at companies that own differentiated software that could be
additive to the Adapt IT market reach. Our software reach will be extended across the Rest of Africa and International markets, extending our
reach beyond the 53 countries we service worldwide.

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Shareholders are advised that Adapt IT's annual compliance report in terms of Section 13G(2) of the Broad-based Black Economic Empowerment
Amendment Act No 46 of 2013, is available on Adapt IT's website: http://www.adaptit.co.za.

CORPORATE INFORMATION

ADAPT IT HOLDINGS                       DIRECTORS                                   SPONSOR
LIMITED                                 Craig Chambers* (Chairman)                  Merchantec Capital
Incorporated in the Republic of South   Sbu Shabalala (Chief Executive Officer)     2nd Floor, North Block
Africa                                  Tiffany Dunsdon (Commercial Director)       Hyde Park Corner Office Towers
Registration number 1998/017276/06      Nombali Mbambo (Chief Financial Officer)    Corner 6th Road and Jan Smuts Avenue
Share code: ADI                         Bongiwe Ntuli*                              Hyde Park
ISIN: ZAE000113163                      Catherine Koffman*                          Johannesburg
                                        Oliver Fortuin*                             2196
COMPANY SECRETARY                       * Independent non-executive director
Statucor (Pty) Ltd                                                                  CORPORATE BANKERS
22 Wellington Road                      TRANSFER SECRETARY                          The Standard Bank of South Africa Limited
Parktown                                Computershare Investor Services (Pty) Ltd   ABSA Bank Limited
2193                                    PO Box 61051, Marshalltown, 2107
                                        T +27 (0) 11 370 5000                       LEGAL REPRESENTATIVES
REGISTERED OFFICE                       F +27 (0) 11 688 5200                       Bousfield Incorporated
Adapt IT Johannesburg Campus                                                        Michalsons
152 14th Road                           AUDITORS
Noordwyk                                Deloitte & Touche                           ADAPT IT WEBSITE
Midrand                                                                             http://www.adaptit.co.za
South Africa

SOUTH AFRICAN OFFICES
GAUTENG                        KWAZULU-NATAL                WESTERN CAPE
Adapt IT Johannesburg Campus   Rydall Vale Office Park      Great Westerford
152 14th Road                  5 Rydall Vale Crescent       3rd Floor
Noordwyk                       La Lucia Ridge               240 Main Road
Midrand                        Durban                       Rondebosch
South Africa                   T +27 (0) 31 514 7300        Cape Town
T +27 (0)10 494 0000           F +27 (0) 86 602 8961        T +27 (0) 21 200 0480

INTERNATIONAL OFFICES
MAURITIUS                      AUSTRALIA                    BOTSWANA
Building 10                    Adapt IT Australia           Fairscape Precinct
Clarens Field Business Park    5/15 Queen Street            Plot 70667
Riviere Noire Road             Melbourne                    Fairgrounds Office Park
Bambous, 90203                 VIC 3000                     Building 2 Floor 5
Mauritius                      Australia                    Gaborone
T +230 452 9349                T +61 38 611 5401            Botswana
                                                            T +267 316 7456
                                                            F +267 316 7457

IRELAND                        KENYA                        NEW ZEALAND
City Junction Business Park    Adapt IT Solutions Limited   Level 6
1st Floor, Chase House         Kilimani Court               Grand Annexe Tower One
Northern Cross, Malahide Rd    No 8 Kilimani Road           84 Boulcott Street
Dublin 17                      Nairobi                      Wellington, 6011
Ireland                        T +254 713 088 068           New Zealand
T +353 1 687 3732                                           T: +64 4 931 1480



Date: 16/08/2018 01:38:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story