JSE-listed IT firm AdaptIT Holdings reported growth of 60% in its interim revenue, but a soaring cost-of-sales margin meant profit remained almost unchanged. AdaptIT reported R60.5-mn revenue income for the 6 months to end-August 2009, compared to R37.8-mn for the comparable period in 2008. However, the company ended up with a R4.8-mn profit after taxation, from R4.5-mn in the same period in 2008. This is mainly due to its cost-of-sales margin, which increased to 59% from 49% in 2008. While the group did not give an explanation for the rise, a once-off transaction cost relating to AdaptIT's acquisition of ITS Holdings and difficult trading conditions seemed to have contributed. "The tough market conditions prevailing mainly in manufacturing and mining sectors have reduced operating profit of the AdaptIT and ApplyIT operating segments," the company said.
AdaptIT's strategy is to pursue growth through both organic and acquisitive means. So far, it seems to be paying off with ITS contributing a profit before tax of R0.7-mn for 2 months. AdaptIT's existing segment ApplyIT contributed R0.1-mn for 6 months. This is compared to R2.2-mn in the comparable period. "Notwithstanding the current economic situation, we are positive about the prospects of the group," AdaptIT said.
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