subscribe: Daily Newsletter


GijimaAST enjoys a positive year


GijimaAst reported a 5,3% growth in income to R2,1-billion for the year ended 30 June 2007 (2006: R2-billion) in a highly competitive market where the pace of major public sector awards remained slow.

Optimisation of service delivery and overhead costs to counter ongoing commoditisation pressure in traditional outsourcing contributed to a 32% increase in operating profit to R94,7-million. Headline earnings per share increased by 89,1% to 5,54 cents per share from 2,93 cents in the comparable period.
Basic earnings per share more than doubled to 5,57 cents per share from 2,51 cents in the comparable period, a 122% increase.
The benefits of GijimaAst’s entrenched client-centric structure have started filtering through with a more innovative approach from all client-facing employees and a greater focus on long-term partnerships with key clients.
As regards new contracts, Carlos Ferreira, chief financial officer comments that “we won a number of substantial projects and outsource deals during the year from blue chip organisations including the South African Revenue Services, De Beers, Anglo American, Eskom, GEPF (Gauteng Employment Pension Fund). We also concluded several key renewals including Mittal Steel and Columbus Steel".
The group’s largest division, Infrastructure Services, reported revenue of R1,1-billion, a decline of 5,5% resulting mainly from client cost reduction pressure. Mechanisms to reduce service delivery costs were insufficient to fully offset pressure on margins. The group’s network offering, which benefited from increasing deregulation in the telecommunications environment, performed well.
Software and Professional Services showed an 11,5% increase in revenue with a pleasing 33% improvement in operating profit. Microsoft Professional Services performed well and ERP Solutions benefited from high levels of activity in the South African SAP environment, with good deal flow.
Although Industry Niche Solutions showed good revenue growth of 26%, Manufacturing Solutions’ performance had a negative impact on profitability.
Financial and Retail Services continued to gain ground in the market, retaining its leadership in cheque processing with strong annuity income.
The Mining Solution centre returned lower profits due to significant Research and Development expenditure made to expand its proprietary software range coupled with the roll-out of its internationalisation programme.
GijimaAst is competitively positioned in its chosen market segments, has excellent relationships with world class suppliers, top certifications, the best skills in the industry and its client base includes the leading South African companies. The recent appointment of Jonas Bogoshi as CEO, succeeding John Miller, will enable the group to deliver on its inherent value.
“During 2008, we will encourage innovation of our offering to widen our competitive advantages while ensuring quality of service through best practice and ensure that the client centric structure pays off,” comments Bogoshi. “Delivery on these operational objectives is the basis for delivering profitable revenue growth across public and private sector.”
The Board of Directors approved a maiden dividend of 1,5 cents, for approval at the Annual General Meeting.