Johannesburg - empowered South African Information and Communications Technology company Gijima Group [JSE:GIJ] on Tuesday reported fully diluted headline earnings per share of 16.37 cents for the year ended June 2010, from 11.42 cents previously.
Fully diluted earnings per share rose to 16.31 cents from 11.39 cents earlier.
A final cash dividend of 2.5 cents per share was declared, which together with the interim dividend of 2.5 cents paid on March 23, is in line with last year's dividend of 5 cents per share.
Revenue declined to R2.94bn rand from R3.01bn previously, while the group's operating profit rose to R240.9m, from R196.5m in 2009.
"The 2010 financial year has been a challenging one for Gijima and the ICT sector in general. After a reasonably satisfactory first half, Gijima's second half was impacted by muted growth in ICT spending in both the public and private sectors," the group said.
It added that it was negatively affected by the unresolved dispute with the Department of Home Affairs (DHA) over the Who Am I Online (WAIO) contract, which the Department contends is invalid. Gijima and the Department are in discussions to resolve the issue, it said.
Gijima noted little growth in the ICT industry over the previous 12 months, with public sector spending still depressed after the global financial crisis and private sector growth recovery slower than expected.
"Nevertheless, Gijima ended the year to June 2010 with increased headline earnings from revenues slightly lower than last year," it said.
The group said it remains well balanced with 48% of revenue coming from the public sector and 52% from the private sector.
Looking ahead, Gijima said market conditions are expected to remain challenging during 2011, with both private and public sector ICT spend likely to remain constrained.
"We expect continued consolidation in the local ICT industry, and have noted the increased interest in South African companies from abroad.
"After being out of favour for many years, outsourcing of ICT services is once again gaining support, particularly in the financial services sector. Gijima is well positioned to take advantage of this trend," it said.
It added that the international scope of its service delivery continues to grow with the accelerating globalisation of the group's client base.
"New technology and increasing availability of broadband connections enable us to offer services to clients wherever they are operating in the world."
Gijima has embarked on a programme of establishing the Next Generation Services, designed to achieve a number of client-oriented benefits and provide cost-effective services.
"One aspect of the programme is developing client services using what is known as cloud computing - the public cloud, where data and applications are housed on servers in international locations, and the more secure private cloud, making efficient use of servers at Gijima sites," it said.
The group pointed out that use of these services is increasing in South Africa, although the country remains behind the international adoption rate. The international trend is that the public sector in particular is making increasing use of cloud computing.
"Gijima has formed international alliances with other world leading ICT companies to provide these services to clients in both the public and private sectors, here and in other African countries.
"Gijima is in the process of reviewing its business model to increase the focus on clients, which will be coupled with an increased focus on ensuring industry vertical dominance," it concluded.