Technology group Gijima has shown a strong turnaround in its performance in the six months to December 2011. It’s profit line is back in the black after it was forced to write-off a significant sum in the prior period to a dispute with the department of home affairs over the “Who Am I Online” contract.
Revenue increased by 7,5%, with earnings (before interest, tax, depreciation and amortisation) showing an 83,5% increase on the same period in 2010 (excluding charges related to the home affairs deal cancellation).
The company’s professional services division was the top performer during the period, with revenue growth of 26,3% on 2010 and a profit of R36,4m — a figure sure to please shareholders when compared with the reported loss of R37,7m previously.
Revenue for the managed services division was marginally down for the period, while profit for the division was down by a substantial 35%. Gijima attributes this to its unified communications, data centre and security units that saw low sales volumes.
Other areas that enjoyed growth in revenue were the industrial (mining and manufacturing) sector, which reported 8,5% growth during the period; financial services clients which grew by 6,9%; and public services which increased sales by 6%.
Gijima says it spent R18m restructuring senior management in order to become more “client centric” and less “product or business unit centric”.
The group incurred a non-cash forex loss of R8,6m, which is says is mostly accounted for by the consolidation of its foreign operations.
Net cash balances increased significantly to R199,1m, and the group generated R136,4m in cash from operating activities during the six months, of which R42,5m was as a result of positive working capital management.
While there is some good news for investors, they’ll be less pleased to learn that Gijima has opted not to pay a dividend for the period. It says the board will reassess this decision at the end of each period and may well pay dividends in future, depending on the company’s performance at the time.
Gijima was trading up 3,6% in midmorning trade on Tuesday, following publication of the group’s interim results. — Craig Wilson, TechCentral
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