GijimaAst regains glory

Johannesburg, 28 Feb 2008

GijimaAst's focus on "cutting out the fat" resulted in the company producing solid bottom line growth for the six months ended 31 December.

Over the period, the company increased revenue by 18%, to R1.2 billion, while earnings per share (EPS) and headline EPS climbed 263% and 279%, respectively.

Presenting his second set of financial results, new CEO Jonas Bogoshi said GijimaAst's profitable revenue growth strategy was gaining traction.

"We've had a good period. We've improved our margins, further reduced cost structures, signed new deals and contract renewals in the public and private sector and got our client-centric structure embedded into the organisation," he commented.

Drilling down

Bogoshi revealed the company's three key operating areas had shown good improvement.

"We've had ongoing competitive pressures in our infrastructure managed services division, but we have been able to strengthen our operating margins. In this division, we are placing high emphasis on increasing service-related revenues where margins are even higher," said Bogoshi.

Revenue in the infrastructure managed services division climbed 22%, to R659 million, while operating profit climbed 34%, to R48 million.

Although Bogoshi was pleased with the revenue and operating margin growth from GijimaAst's professional services division, he highlighted its Microsoft professional services competence as an area of disappointment.

"Personally, I'm not happy with our performance on the Microsoft professional services side. The results were quite flat and must do better in the next period. We will bring this back to resume its historic performance; it must become a leader in that market."

Overall, the professional services division grew revenue by 19%, to R365 million, and operating profit by 175%, to R17 million.

As for its high-margin industry niche solutions division, Bogoshi revealed its vertical industry focus continued to deliver benefits across the group.

"We had a record performance from mining solutions as they leveraged the investment from the last financial period. Our effort to gain a foothold in the financial and retail industries is gaining ground. And industrial solutions has shown a substantial profit improvement following the streamlining of that business," he said.

Although revenue in this division only increased 3%, to R170 million, operating profit soared by 681%, to R14 million.

More ahead

Bogoshi and group FD Carlos Ferreira expect a stronger performance in the second half of the year.

"The market is buoyant and we continue to see growth in the industry. Our aim is to grow at double the industry standard," said Bogoshi.

Ferreira added the company still had some fat that could be cut, which - when added to the revenue increase from deals signed in the last few months - would result in positive results for the full-year.

GijimaAst's share price rose 4% yesterday, to close at R1.03 per share.