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Johannesburg - Gijima [JSE:GIJ] shares tumbled more than 50% after the IT firm swung to a first-half loss due to tough market conditions.
The company said late on Thursday, ahead of the four-day Easter long weekend, that its interim diluted headline loss per share for the six months to end-December totaled 10.58 cents from a profit of 3.11 cents a year earlier.
Revenue from continuing operations was down 23% to R911.20m‚ from R1.186bn a year earlier. The loss for the period was R23.73m‚ from R28.56m profit previously.
The company said the loss from continuing operations was a direct consequence of the pressure on the company's revenue line.
The implementation of initiatives to fix its cost base commenced in November last year and are expected to be finalised before the end of the current financial year.
“The company has incurred expenditure of some R47m during the interim reporting period on a major project without recognising revenue. Differences over pricing methodology and scoping on this project have now been resolved with our customer‚” it said.
Gijima plans to raise R150m by way of a renounceable rights offer to recapitalise the company.
Gijima, the biggest percentage loser on Johannesburg's Fledgling index of small caps, was down 53.33% to 7 cents, its lowest level on record.
