{"id":35127,"date":"2013-04-10T00:22:46","date_gmt":"2013-04-09T22:22:46","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=35127"},"modified":"2013-04-10T09:21:30","modified_gmt":"2013-04-10T07:21:30","slug":"gijima-to-cut-staff-count-by-10","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/it-services\/35127\/gijima-to-cut-staff-count-by-10\/","title":{"rendered":"Gijima to cut staff count by 10%"},"content":{"rendered":"

Gijima<\/a>, the troubled JSE listed IT company,\u00a0says its aims to make \u201cminor retrenchments\u201d by reducing its current headcount of 2,500 by\u00a0around 250, or 10%.<\/p>\n

Earlier this month, the group posted an interim loss of R123.36 million.<\/p>\n

It 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.<\/p>\n

Shares in Gijima have declined from a high of 36 cents at the start of the year, and a year best of 53 cents.<\/p>\n

On Monday, the group lost nearly 17% to 10 cents giving it a market cap of R96.4 million, shedding an additional cent on Tuesday (9 April).<\/p>\n

Eileen Wilton<\/a>, acting CEO told BusinessTech:<\/p>\n

“The Gijima board and management team are extremely grateful to all the employees for their valuable contribution and commitment towards the renewed growth path envisaged by Gijima.\u00a0 We have all experienced the tough global economic conditions, but the valuable insights we as a team gained over the last few months will enable us to weather the storm.<\/p>\n

“Nevertheless, Gijima had to minimise the headcount by means of: Freezing recruitment, the natural attrition is contributing to savings; Not renewing contractor assignments, where the skill is not essential; Exiting non-performing employees where its concluded that their performance cannot be turned around.<\/p>\n

“Over and above this, there will be some minor retrenchments. \u00a0Gijima expects to reduce its current headcount of 2,500 by\u00a0around 250,\u00a0with 70% of this process already completed.”<\/p><\/blockquote>\n

Wilton said that the group is confident that it is equipped and positioned for strong growth after a challenging operational period.<\/p>\n

\u201cGijima has received a firm commitment from 80% of its top clients to continue their relationship. Gijima has a full complement of 1,037 clients,\u201d it said after reporting its results.<\/p>\n

Results<\/strong><\/p>\n

For the six months ended December 2012, Gijima reported a 23% decline in revenue from continuing operations.<\/p>\n

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.<\/p>\n

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.<\/p>\n

\"Gijima<\/a><\/p>\n

Rights offer<\/strong><\/p>\n

Gijima is aiming 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.<\/p>\n

The rights offer is expected to be concluded within the current financial year.<\/p>\n

According to\u00a0\u00a0Keith McLachlan<\/a>, a senior equities analyst of small-and mid-caps at\u00a0Thebe Stockbroking<\/a>, and financial blogger at SmallCaps.co.za, the\u00a0\u00a0rights offer is predominantly to inject equity into the business so as to shore up its Debt:Equity (D:E) ratio.<\/p>\n

He said that about R50 million of the rights issue will go to paying debt back, but the group is expecting to remain geared.<\/p>\n

“The day-to-day funding the of the business will come from cash earned from operations, debt and the remaining R100 million from the rights offer.”<\/p>\n

More on Gijima<\/h3>\n

Gijima value obliterated in morning trade<\/strong><\/a><\/p>\n

Gijima delays interims again<\/strong><\/a><\/p>\n

Gijima in the red<\/strong><\/a><\/p>\n

Gijima is in a hole: analyst<\/strong><\/a><\/p>\n

Gijima still mired in red<\/strong><\/a><\/p>\n

Gijima appoints interim CEO\u00a0<\/strong><\/a><\/p>\n

Gijima to cast wide net for new CEO<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gijima says its aims to make \u201cminor retrenchments\u201d by reducing its current headcount of 2,500 employees.<\/p>\n","protected":false},"author":9,"featured_media":35157,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[4346,641,26,3669,5294,1162],"class_list":["post-35127","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-it-services","tag-eileen-wilton","tag-gijima","tag-headline","tag-keith-mclachlan","tag-smallcaps-co-za","tag-thebe-stockbroking"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/35127","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=35127"}],"version-history":[{"count":10,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/35127\/revisions"}],"predecessor-version":[{"id":35174,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/35127\/revisions\/35174"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/35157"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=35127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=35127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=35127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}