Gijima revenue falls 17%
ICT services company, Gijima on Tuesday reported a decline in revenue from continuing operations for the year ended June 2014, to R1.5 billion, from R1.85 billion before.
The revenue is reflective of the full effect of the expiry of two significant contracts from FY 2012, as well as customer delays in awarding contracts, Gijima said.
The ICT firm said that it reduced its operating loss before financing costs to R125.7 million, from R335.6 million in 2013.
The group reported a diluted headline loss per ordinary share of 77.37 cents, from a prior loss of 497.60 cents.
It noted that business profitability has improved significantly, with EBITDA showing a 69% improvement from the prior year loss of R290 million to a loss of R89 million.
“The turnaround strategy is showing significant traction and as we have now stabilised the business, the focus can now be on ensuring revenue generation is at the required levels,” Gijima said.
Warning
The group warned that although good progress has been made with its turnaround activities, “Gijima continues to experience tough trading conditions, which has resulted in the group not complying with the financial covenants related to the group’s borrowings of R213 million in terms of the securitisation of debtors”.
Gijima said it has entered into a new agreement with the financiers subsequent to year-end in which, inter alia, the repayment terms of the loans, of which R107 million is currently disclosed as short-term, have been extended to be repayable in equal tranches of R52.5 million up to 2020.
“The company can confirm that it will be able to pay its obligations when they become due and comply with securitisation financial covenants based on budgeted and forecast cash flows in future,” it said.
The group said it has also determined a need to raise R100 million which will be performed by way of a rights offer, subject to approvals by the shareholders.
Gijima said that through its efficiency drive, it has managed cost savings of some R200 million per annum. “This was achieved without exceeding the industry norm in terms of staff turnover,” it said.
Looking ahead, the group said that new markets are also being explored, specifically in Africa and in state-owned entities which are beginning to show traction.
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