Gijima in the red
Gijima released its interim results on 28 March 2013, revealing a sharp decline in revenue. Despite the poor results the company believes it is well positioned for growth.
For the six months to December 31 2012, revenue from continuing operations was R911m, down from R1.1 billion in 2011. The operating loss from continuing operations was R123m, after a R33m 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,” Gijima said.
“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,” the company said.
Gijima said that during the reporting period, there was top-line pressure, which was exacerbated by a lack of revenue on a major project.
New structure, but results not showing
Gijima said it 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 said it is positive about the growth of the company and has secured a number of new contracts and has extended current contracts.
“Gijima has received a firm commitment from 80% of its top clients to continue their relationship. Gijima has a full complement of 1037 clients,” the company said.
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