GijimaAst has reported revenue up 20% to R3-billion for the year ended 30 June.
The group's EBITDA (before exchange rate gains and losses) was up 82% to R283-million, while the EBITDA margin (before exchange rate gains and losses) was up to 9,4% from 6,2%. The company's net cash balances are up by 183% to R484-million.
GijimaAst is organised into two strategic business units: managed services and professional services.
The economic downturn has had a varying impact on different parts of the business. The overall impact has not been as severe as in other parts of the industry due to the nature of the group's revenue profile and especially its high percentage of long-term services contracts, a statement from GijimaAst says.
However, the business units that have high exposure to the mining sector such as GMSI and those that high product sales dependencies like distributed computing services and unified communications have seen revenues negatively impacted by the downturn.
"A major driving force behind the company's growth has been its focus on the government sector," says Frost & Sullivan senior ICT industry analyst Lindsey Mc Donald.
"Its competitors have failed to capitalise on this sector to the same extent. They are however starting to do so, which means GijimaAstT has greater competition in this space, but it is still able to enjoy the benefits of its first mover advantage."
During the past year, the group has faced the same challenges as the rest of the IT industry. Customers are working with reduced budgets while at the same time expecting greater value offerings from ICT providers. GijimaAST has made use of strategic partnerships with companies such as NEC to maintain favourable pricing.
"While there are some signs that the economy is recovering in the United States, a full recovery is still some time off," Mc Donald says. "South Africa is generally six months behind these markets and this means that these challenges are likely to continue into the next financial year for GijimaAst."
The company's favourable connections with the government sector will however put it in a good position to capitalise on emerging opportunities. While most of the 2010 budgets have been allocated, government organisations are still eager to showcase their competencies and abilities when the visitors arrive, and there are likely to be one or two last minute projects. GijimaAst is well placed to take advantage of these.
The group's results also showed a strengthening in the group's balance sheet, particularly its cash position. This means that it will be able to look for expansion opportunities as the economic recovery takes hold.
Over the next year, Frost & Sullivan expects GijimaAst to consolidate its strong position in the government sector and focus on the rest of Africa as an area for potential growth. It is also likely that the organisation will look to the private sector as a long term growth opportunity. Managed services should become a greater area of focus as clients increasingly look to IT companies for the provision of cost savings and additional value through the provision of these services.
"One of the highlights for the group this year was a contract win outside of the government space – the R100 million deal with Sanlam," Mc Donald says. "The successful completion of this contract will be an important opportunity for GijimaAst to prove that it is just as competent in the private sector as it is in the public space."