ADAPT IT, which provides specialised software to more than 10 000 customers in 55 countries, is preparing to delist from the JSE should its takeover by Canada’s Volaris Group be approved by authorities.
Chief executive Tiffany Dunsdon said in the group’s 2021 annual report released on Monday that if the Volaris deal becomes unconditional, it would likely be the company’s last report to shareholders as a listed business.
“From humble beginnings of small entrepreneurial businesses, a successful R1.5 billion revenue business has resulted, which is well recognised in South Africa and which exports world-class software to 55 other countries,” she said.
Dunsdon said while it marked the end of an era, it also heralds a new and exciting one, and Adapt IT would likely join a very successful group of software businesses.
“I have no doubt we will make the most of all that the new shareholders and colleagues have to offer us in our next growth and development phase.
“Change is inevitable and learning to embrace it rather than resist it is critical to survival and success. We strive to maintain an open mindset and introspect to keep learning and re-evaluating what we do, to make it better, remaining agile and flexible in our decision making to respond and adjust to an ever-changing world,” Dunsdon said.
The Volaris Group made a cash offer of R7 per share or continuation option in a delisted business which was supported by 87 percent of shareholders in June and is in the final stages of regulatory approval and fulfilment of remaining conditions precedent.
The most significant outstanding approval was by the Competition Commission, and is anticipated to be fulfilled by the end of the 2021 calendar year which, if met, would result in the delisting of Adapt IT, said the group.
Adapt IT had been the subject of a takeover bid by JSE-listed telecoms company Huge Group which made an unsolicited share swap offer.
Adapt IT confirmed yesterday that Huge had subsequently disposed of its stake in the company.
“The unsolicited Huge Group share swap offer closed with 1.9 percent of Adapt IT shareholders having accepted it. Huge subsequently disposed of all these shares,” said the group.
In terms of financial results revenue was muted and increased by 1 percent for the year ended June 2021 to R1.503 billion and revenue growth was impacted by the continued Covid-19 pandemic, related regulations and lockdown restrictions.
“While most Adapt IT divisions did not experience major business disruptions during lockdown, some were more affected than others, with project delays and the inability of personnel to be on-site negatively affecting revenue in these divisions,” said the group.
It said the energy division was most impacted by Covid-19 in the past year and experienced a 46 percent decrease in revenue due to project volume declines, cancellations and delays. The earnings before interest, taxes, depreciation, and amortisation margin fell by 4 percent compared to 12 percent in 2020 and contributed 4 percent to total revenue.
“There is continued focus on the recovery of this division and the sales pipeline is improving,” said Adapt IT. Net gearing was reduced to 17 percent from 45 percent and earnings per share were down 2 percent to 50 cents.
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