Gijima targets three year turnaround
Gijima CEO, Eileen Wilton says the listed ICT service provider is six months into a three year turnaround strategy.
On Monday (31 March), Gijima reported a decline in revenue from continuing operations to R741 million, from R911 million in 2012; however, the group narrowed its operating loss to R17.7 million, from R123 million before.
Gijima reported a diluted headline loss per ordinary share of 6.98 cents, from a prior loss of 211.67 cents.
The group said that business profitability has improved significantly, with earnings before interest, taxes, depreciation, and amortisation (ebitda) showing a positive result of R2.7 million, from a R100 million loss in the comparative period up to December 2012.
Gijima cited a continued tough market, the full effect of the expiry of two significant contracts from FY 2012, as well as customer delays in awarding contracts for its interim return.
Speaking at the presentation of the group’s results in Sandton, Wilton said the group anticipates, in broad terms, a three year turnaround. “We are six months into that turnaround,” Wilton said.
The company lead said that Gijima has surpassed its original target to take out R20 million out of the business, monthly, in a cost savings initiative. “Today we are at R22 million per month,” Wilton said.
She admitted that the company has enforced retrenchments, pointing to a number less than 100, with additional cost savings coming from rental. “We are smaller than we were two years ago,” Wilton said.
The group moved into smaller premises in Durban and Cape Town during the course of the reporting period, while renting out space at its headquarters in Johannesburg.
Looking ahead, Wilton said that group has appointed a key sales lead, or chief sales officer, who will join the company on 1 May. The name of the appointment will be revealed in due course, the chief executive said.
Gijima said that over the last 12 months, R1.6 billion from the renewal of contracts together with, in some instances an increased scope, has been concluded.
Wilton said that new markets are being explored, specifically in Africa and in State Owned Entities which are beginning to show traction.
Gijima counts 14 of the top 25 JSE listed companies as clients, with Wilton stating that the group has retained eight out of nine customers in terms of renewals during the reporting period.
On the subject of additional retrenchments, Wilton said: “We are never going to stop looking for efficiencies.”
Wilton said that Gijima’s order book is currently at just under R4 billion, with a pipeline at R7 billion with a large number of tenders submitted to which the group is awaiting award.
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