JSE-listed technology group Gijima has reached a settlement with the department of home affairs, which will result in it completing the disputed, multibillion-rand “Who Am I Online?” IT project.
However, it’s agreed to cut the cost of the implementation, which will result in an “adverse once-off impact” on its earnings per share of 27,99c in the six months to 31 December 2010.
As a result of this, coupled with the impact of the dispute on Gijima’s other operations, the group will report a headline loss of between 27,5c and 28,5c per share from headline earnings of 8,83c a year earlier. Its interim results will be released on Wednesday.
The settlement with home affairs involves “the writing down of certain invoices and the future rendering of support and maintenance services as well as all direct costs that are linked to the settlement, namely legal fees, the cost of skills retention over the duration of the issue at hand, as well as the investment in restructuring the project team to align with Gijima’s involvement in the project”.
The home affairs contract, which was awarded to Gijima in mid-2008, involves the overhaul of the department’s IT infrastructure. It includes the implementation of a new integrated core IT system.
“The settlement brings the project back in line with the original objectives and cost estimates,” Gijima says in a statement to shareholders. “The total final capital cost of the items in the scope of this project, including expenditure to date of approximately R1,4bn, is estimated to be approximately R2,27bn. This is in line with the treasury budget of R2,23bn for the project, which was conditionally approved in 2009.” — Staff reporter, TechCentral
- See also: Gijima gets its home affairs job back
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