Despite experiencing a challenging financial year with revenue from continuing operations down 17% for the year to 30 June 2013, Gijima is confident that it will return to profitability in 2014.
Second half results show that the operating loss (excl. once off items) has been reduced to R10-million, from about R50-million in the first half.
“The result of two significant contracts that expired after several years of delivery in the previous financial year, a tough market, and significant top-line pressure on a major project contributed to this position,” says Eileen Wilton, interim CEO at Gijima.
One of the highlights was the successful conclusion of a fully underwritten rights offer of R150-million. Gijima’s long standing shareholders, GUMA (R75-million), Allan Gray (R35-million), Investec (R15-million) and Futuregrowth (R6-million) injected the bulk of the cash for the rights offer.
The offer was subscribed to by 83% of the shareholders and raised R135-million after expenses. The company also repaid the first tranche of R17-million plus interest of the A Class Debenture within the required time frame, subsequent to year-end.
Additionally, Gijima has concluded the sale of its mining and technology consulting business, MineRP. This now provides the company with an opportunity to pursue the unwinding of the complex international structure which it inherited from the old AST.
It has put processes in place to streamline the business and bolster performance for the next financial period.
“We implemented refinements to the structure of the business model to improve our efficiencies. This included reducing and consolidating our service offerings to ensure a focus around the core competencies of the organisation. The management and the board have been involved in a turnaround strategy of the company since June 2012,” says Robert Gumede, Gijima chairman.
The appointment of new leadership in management and at board level that included ICT veteran Eileen Wilton who became the interim CEO in October last year and Liesl Tweedie as interim CFO in July 2013.
“The board has been happy with the leadership role that is played by both Eileen and Liesl since their appointment in their current roles. They have worked well with the Board as they the charge by management, as the company embarks on this journey to restore it to its former glory.
“Our major shareholders have also indicated their support of our turnaround strategy and management team that will drive the new business strategy,” says Gumede.
Its focus going forward will be on retaining and growing its existing client base as well as continued focus on right-sizing the business to improve its financial position.
“We also value the role our competent and dedicated employees play in the organisation. This is going to be an exciting year for the company. Further strengthening our position is our strong BBBEE level 2 credentials and the robust corporate governance processes we have put in place,” adds Wilton.
Gijima has also had several industry achievements during the past year, including the world’s first Oracle spatial solution implemented within the public sector and winning an unprecedented six Microsoft partner awards in this past financial year.
In addition, Gijima deployed more than 1,8-million mailboxes to the cloud, processed more than 2,4-trillion cheques since going live with its cheque processing solutions, and managed more than 1-million connected devices on behalf of its clients.
“We have renewed all major long term annuity contracts with key clients whose contracts became renewable during the period under review and all told, we are looking forward with confidence to the next 12 months. All the hard work we have done in recent times is starting to pay off and we cannot wait to re-energise our brand as one of the leading ICT solutions providers in the market today,” says Wilton.