Tech stock watch: Gijima suffers
Under-pressure ICT group, Gijima declined 12.5% in afternoon trade on the JSE on Wednesday (23 May), with the group having more than 20% shaved off its share price in recent weeks.
On a day when global markets have tumbled, including the All Share Index (off 1.28%), as a result of negative sentiment on the EU debt crisis, Gijima declined 12.5% – or 5 cents – to 35 cents.
A local dealer noted that trade in the company’s shares were rather thin, while global markets were suffering amid issues in the Eurozone.
Earlier in the week, Gijima said it had secured the extension of its long-term debtors securitisation funding programme, initiated in July 2006.
However, last week (15 May), the group said it would cut its staff quota by between 8% and 12% as part of a streamlining exercise.
Gijima employs approximately 3,080 people, which means that the group’s actions could see between 245 and 367 people lose their job.
The group said in a statement that the ICT industry landscape has changed dramatically, with ICT spend globally under pressure while commoditised offerings have become the most price-sensitive.
“At the same time, clients, particularly those in the financial sector, have come under pressure to be even more competitive following global acquisitions,” the group said.
In its most recent earnings report (21 February 2012), the group pointed to a return to profit, posting a diluted headline earnings per share of 3.11 cents for the six month ended December 2011, after a loss of 28.13 cents a year ago.
Revenue increased by 7.5% to 1.337 billion, with earnings before interest, tax, depreciation and amortisation reflecting an 83.5%, at R78.2 million.
In other tech stocks, Business Connexion was down 19 cents – or 4.05% – to R4.50, while Datatec (DTC) was off 80 cents or R1.76, to R44.70. The information and communications technology (ICT) group said on Tuesday that its 100% subsidiary, Westcon Group, has acquired the 33.1% interest in its African subsidiaries (Westcon Africa).
The transaction does not apply to Westcon SA, which remains under the ownership of Datatec (74%) and its BEE partner, the Mineworkers Investment Corporation (26%).
The rationale for the transaction is to achieve full ownership of the African businesses in the Westcon Group.
Hardware distributer, Mustek lost 13 cents – or 2.11% – to R6.02 and telecoms and ICT group, Reunert shipped R1.57 – or 2.29% – to R67.10. The latter is expected to publish its interim results on Monday (28 May).
It expects normalised headline earnings per share will be between 11% and 17% higher for the six months ended 31 March 2012, from 260.7 cents previously.
The group anticipates headline earnings per share will be between 12% and 18% higher for the period, from 262.7 cents in 2011.
MTN was modestly lower, off 38 cents to R132.80, while Vodacom declined 72 cents to R103.78.
Telkom slipped 13 cents lower to R23.80.
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