Gijima value obliterated in morning trade
ICT group Gijima halved its value in a single morning of trade on the JSE after the group posted an interim loss of R123.36 million.
By lunch on Tuesday, shares in Gijima had declined 46.67% – or seven cents – to eight cents giving the company a market cap of R77.47 million.
Having twice delayed its interim results for the period ended December 2012, Gijima pushed out an announcement in very late trade on Thursday (28 March), ahead of the Easter weekend.
Shares in Gijima have declined from a high of 36 cents at the start of the year, and a year best of 53 cents.
Results
For the six months ended December 2012, Gijima reported a 23% decline in revenue from continuing operations.
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 in 2012.
This translated into a loss in headline earnings per share from continuing operations of 11.12 cents, compared with positive earnings of 1.47 cents in 2011.
Gijima Operating Profit 2012/2013
Business focus
Gijima says it employs more than 2,500 professionals in more than 100 offices and service centres throughout southern Africa.
The group bemoaned 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 noted that 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,” it said.
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, Gijima said.
Rights offer
Gijima said it has decided to raise R150 million by way of a rights offer in order to re-capitalise the company, to ensure compliance with all of its funding covenants under the securitisation and to finance its working capital requirements.
The rights offer is expected to be concluded within the current financial year.
Eileen Wilton
CEO appointment
The group is also currently operating under the leadership of an interim CEO.
Jonas Bogoshi, Gijima’s former CEO stepped down from the group last year after five years at the helm. Eileen Wilton was then appointed as interim CEO, from her prior position as chief operating officer (COO) at the group.
Future outlook
Gijima said it remains 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 1,037 clients,” it said.
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