Gijima’s management team is “confident” it has taken the “correct strategic decisions” to get the company “back on track”, despite reporting a massive R210,8m loss in the financial year ended 30 June 2013, from a much smaller loss of R50,6m in 2012.
The financially troubled company, which recently conducted a rights offer to raise R150m from shareholders, says it is “well advanced in implementing its turnaround strategies and will further capitalise of cost savings achieved this year”.
“In terms of normal operations, the loss incurred in the second half of the 2013 financial year of R10m was significantly reduced compared to the first half. This shows that significant traction in terms of the turnaround strategy has been achieved,” it says.
“However, revenue from continuing operations was down compared to the previous financial year and the result of two significant contracts that expired after several years of delivery in the previous financial year, a tough market and significant top-line pressure on a major project, contributed to a challenging financial year.”
For the full year, Gijima’s revenue slid by R371m to R1,85bn, while its operating loss grew from R72,1m in 2012 to R335,6m in 2013. Cash in hand at the end of the year was R198,6m, from R117m in 2012.
The company insists its turnaround efforts are bearing fruit and that it has renewed all of its large, long-term annuity contracts with key clients whose contracts became renewable during the 2013 financial year. However, government business “continues to be a challenge” as it awaits State IT Agency adjudication of a number of tenders.
“Gijima’s new leadership, as well as the recent appointment of reputable business leaders at board level, will continue to drive this turnaround and is testimony to Gijima’s commitment to structure the business for growth and profitability,” it says.
However, the company has yet to appoint a permanent CEO, and continues to be led by Eileen Wilton in an interim capacity. It also now has an interim chief financial officer in Liesl Tweedie following the recent resignation of long-serving finance head Carlos Ferreira.
No dividend has been declared.
Gijima’s share price has added more than 30% in the past week in anticipation of the 2013 results, but is trading down by 90% year on year. — (c) 2013 NewsCentral Media
- TechCentral will bring you more after Gijima’s results presentation in Johannesburg later on Monday
