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Gijima expects higher full-year earnings

Johannesburg – Empowered information and communications technology company Gijima AST [JSE:GIJ] said on Tuesday that it expects headline earnings per share (Heps) and basic earnings per share (EPS) to improve by between 35% and 55% for the twelve months ended June 30, 2010.

Gijima said its profits had in previous reporting periods  been impacted by foreign exchange translation differences on consolidation of its intergroup loan accounts denominated in foreign currencies.

However, these translation differences no longer influence the company's profits and are, from July 1 2009, recorded within the company's equity, it said.

Gijima noted that should the impact of foreign exchange translation differences be eliminated in the 12-month reporting period ended June 30 2009, its EPS and Heps for the year ended June 30 2010 are expected to improve by up to 10% - in the range of 15c and 17c - from previously.
 
"These numbers reflect a conservative approach to recognising the revenue earned by Gijima in relation to the 'Who Am I Online' contract with the department of home affairs in acknowledgement of certain project uncertainties up to year-end that flowed from the letter Gijima received from the department in which the validity of the contract was contended," it said.

Gijima earlier reported that it had received a letter dated April 13 2010 from the department of home affairs, in which the  department contended the validity of a contract it concluded with Gijima in June 2008. The contract for the 'Who Am I Online' system covers the design, development and implementation of an integrated core system for the department, including all business processes of both its civics and immigration divisions.

"Shareholders are advised that Gijima continues to engage in without prejudice negotiations with the South African government to resolve the dispute regarding the contract.
 
"Gijima remains committed to pursuing a commercial resolution to avoid litigation to resolve the dispute," the group said.

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