JSE-listed Adapt IT on Tuesday posted a double-digit decline in profit and earnings for the six months ended December 31.

The group’s profit for the period contracted by 31% to R26-million for the interim period under review, while headline earnings per share (HEPS) and normalised HEPS decreased 23% and 10% respectively to 18.93c and 31.18c.

A difficult trading environment, the adoption of International Financial Reporting Standard 16 and higher finance costs impacted on the financial results for the half-year under review, the company highlighted.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) remained flat at R106-million, with an Ebitda margin of 15%.

During the six months to December 31, revenue increased by 10% to R721.2-million.

“Adapt IT achieved a 10% growth in revenue . . . aided by the contribution from strategic acquisitions made in the previous financial year, while weaker trading conditions in South Africa continued to weigh on the organic growth for some divisions reliant on Adapt IT’s primary market,” Adapt IT CEO Sbu Shabalala explained.

While organic revenue declined by 1%, acquisitions contributed a positive 11% to revenue growth from the contributions of Strive Software for two months, Conor Solutions for six months and Wisenet group for six months and created additional geographic diversification of revenue.

While the South African market remained challenging, Adapt IT continued to focus on leveraging its underlying diversification, with a focus on sales in a cohesive manner, driving efficiencies and expanding on the pan-African and Asia Pacific strategy, he explained.

“Adapt IT strengthened its pan-African footprint, resulting in this region contributing 16% to revenue with a heightened presence in East Africa.

“Asia Pacific contributed 8%, strengthened by the acquisition of the Australia-based Wisenet group. As a result of this diversification strategy, international revenue for the six months improved to 27%.”

Adapt IT did not declare a dividend as a review of the company's capital structure is under way.