Johannesburg - There was still a “tough journey ahead” for Gijima, chief executive Eileen Wilton said yesterday as the technology company reported a return to profitability at the expense of rigorous cost-cutting in the six months to December last year.
Wilton said the company anticipated in “broad terms” that it would be a three-year turnaround process. In essence, Gijima was only six months into that programme, she said at the presentation of the financial results.
Elements of the plan included a moratorium on new recruitment, she said. “We don’t need to retrench.”
Gijima provides services to corporates and the public sector that include desktop services and systems integration.
Although the firm had already realised a targeted R200 million annual savings from cost-cutting it had already implemented, Wilton intended to eliminate further expenses on overheads at corporate level. She said the current structure was “geared for a business more than double our size”.
A further attack on costs would eliminate license fees, software instances and office costs, among other things.
During the half-year period, the company consolidated office space at its Samrand, Centurion headquarters and leased the vacant buildings to other companies. “We are smaller than we were two years ago,” Wilton said.
Gijima’s property portfolio had also reduced in its Cape Town and Durban satellite offices. “There is quite a lot of work for the next 12 months.”
Wilton was appointed as interim chief executive in 2012 following the departure of Jonas Bogoshi, who presided over the Who Am I Online contract to provide a biometric system for the Department of Home Affairs.
She was appointed as full-time chief executive last year.
The fallout between the department and Gijima over work that was meant to be done on the contract was the start of a long bad spell which had a severe impact on the financial performance of the company from 2010. But it is now aiming to shed its overreliance on the public sector in favour of increased business from the private sector.
Wilton said, however, that Gijima was “onto a new road with Home Affairs.”
Gijima is providing an intergrated receipting engine for payments to the department in addition to work on the Who am I Online project.
The company reported a 19 percent drop in revenue to R741m in the six-month period. It was the first full year that the impact of the sale of the Mine ERP subsidiary and the non-renewal of outsourced information technology (IT) contracts with Absa and the SAPS were visible.
In 2012 Absa did not renew an IT contract with Gijima after parent firm Barclays decided to in-source it. The SAPS put its contract out to tender again.
Profitability improved to R2.7m from a loss of R100m previously.
The basic loss a share reduced to 19.84c compared with R2.2231 for the half-year to December 2012.
Gijima, which withheld dividends, was pursuing opportunities to sell its software in the rest of Africa, Wilton said.
The shares jumped 19.4 percent to close at 67c yesterday. - Business Report