GijimaAst`s revenue decline has been halted and the group is heading in the right direction, says financial director Carlos Ferreira.
"We`ve arrested the decline in revenue, arrested the decline in profits, and the company is now turning around," he says, commenting on this week`s release of the group`s latest interim financial results.
Revenue for the six months to December rose to R879.5 million from a year-earlier figure of R736.28 million.
However, Ferreira says the results are not truly comparable, as the prior-year figures exclude those of Gijima, which was merged into AST Group to create the new GijimaAst.
On a combined basis, prior-year revenue was R884.44 million.
Ferreira says the main challenge during the period was to contain costs in an environment where revenue was not increasing. He adds that increases in the group`s costs were kept below inflation.
Earnings before interest, tax, depreciation and amortisation (EBITDA), on a comparable basis, slipped from R63.01 million to R60.47 million. An EBITDA margin of 6.9% compares with a previous 7.1%. Ferreira says the decline is mainly owing to non-cash items over which the company has no control.
An analyst says he was hoping the pace of recovery would be quicker. "But if you strip out all the non-operational and once-off items you still get operating margin expansion," he adds.
"So these results were a little disappointing, but the prognosis is still positive. I think they are definitely heading in the right direction."
The analyst says there is a lot of business available, and GijimaAst, which is pursuing deals aggressively, is in a good position to compete.
CEO John Miller says the group does not want to cut costs further, following the completion of the group`s recent turnaround programme, as GijimaAst has invested heavily in areas that are likely to generate substantial business in the future.
"Ours is a long-term business," he adds. "There are very few areas that can take an order today and turn it into revenue tomorrow."
Miller is confident about the group`s prospects. "We win one out of three contracts we bid for," he says. Extrapolating on this, he says there is a possible R1.5 billion worth of business in the pipeline.
Miller adds that the group is well positioned for government opportunities and the Wincor Nixdorf business is also in a strong position as banks look at asset refreshes on ATM and ancillary channels.
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