Gijima believes it is positioned for strong growth after a challenging operational period.
For the six months to December 31 2012, revenue from continuing operations was down 23% from the previous comparable reporting period. This followed the expiry of a long term services contract, coupled with the decision by another long-term client to insource part of the services rendered by Gijima.
These two contracts had comprised a significant portion of Gijima’s revenue. During the period, there was top-line pressure, which was exacerbated by a lack of revenue on a major project.
Revenue from continuing operations was R911-million, down from R1,1-billion in 2011, and the operating loss from continuing operations was R123-million, after a R33-million operating profit. This translated into a loss in headline earnings per share from continuing operations of 11,12c, compared with positive earnings of 1,47c in 2011.
The loss from continuing operations incurred during the period is partly a consequence of the pressure on the company’s revenue line. Gijima incurred expenditure of about R47-million during the interim reporting period on a major project without gaining revenue. A disparity in terms of the timing of earning the revenue was experienced in this financial year with cost being incurred without revenue secured.
This will be rectified in the next financial year. The company has completed the implementation of its new structure, and its business model has been altered to reflect an organisation where client-centricity is the primary focus. However, the new model has not yet yielded the desired levels of revenue generation.
The implementation of initiatives to fix the company’s cost base commenced in January 2013 and is expected to be finalised before the end of the current financial year.
In addition, the board has decided to raise R150-million by way of a rights offer to qualifying Gijima shareholders. It is envisaged that sufficient equity capital will be raised through this rights offer to ensure that its funding covenants will be met and provide sufficient headroom to cater for unforeseen risks.
The rights offer is expected to be concluded within the current financial year.
Gijima has the requisite shareholder support for the implementation of the rights offer, given the support that was provided by Allan Gray and Investec Asset Management.
The final terms, salient dates and pro forma financial effects of the rights offer are in the process of being finalised and will be announced in due course.
Gijima is positive about the growth of the company and has secured a number of new contracts and has extended current contracts. The company has received a firm commitment from 80% of its top clients to continue their relationship. Gijima has a complement of 1 037 clients.
For the six months to December 31 2012, revenue from continuing operations was down 23% from the previous comparable reporting period. This followed the expiry of a long term services contract, coupled with the decision by another long-term client to insource part of the services rendered by Gijima.
These two contracts had comprised a significant portion of Gijima’s revenue. During the period, there was top-line pressure, which was exacerbated by a lack of revenue on a major project.
Revenue from continuing operations was R911-million, down from R1,1-billion in 2011, and the operating loss from continuing operations was R123-million, after a R33-million operating profit. This translated into a loss in headline earnings per share from continuing operations of 11,12c, compared with positive earnings of 1,47c in 2011.
The loss from continuing operations incurred during the period is partly a consequence of the pressure on the company’s revenue line. Gijima incurred expenditure of about R47-million during the interim reporting period on a major project without gaining revenue. A disparity in terms of the timing of earning the revenue was experienced in this financial year with cost being incurred without revenue secured.
This will be rectified in the next financial year. The company has completed the implementation of its new structure, and its business model has been altered to reflect an organisation where client-centricity is the primary focus. However, the new model has not yet yielded the desired levels of revenue generation.
The implementation of initiatives to fix the company’s cost base commenced in January 2013 and is expected to be finalised before the end of the current financial year.
In addition, the board has decided to raise R150-million by way of a rights offer to qualifying Gijima shareholders. It is envisaged that sufficient equity capital will be raised through this rights offer to ensure that its funding covenants will be met and provide sufficient headroom to cater for unforeseen risks.
The rights offer is expected to be concluded within the current financial year.
Gijima has the requisite shareholder support for the implementation of the rights offer, given the support that was provided by Allan Gray and Investec Asset Management.
The final terms, salient dates and pro forma financial effects of the rights offer are in the process of being finalised and will be announced in due course.
Gijima is positive about the growth of the company and has secured a number of new contracts and has extended current contracts. The company has received a firm commitment from 80% of its top clients to continue their relationship. Gijima has a complement of 1 037 clients.