Johannesburg - Technology firm Gijima AST [JSE:GIJ] will
soon embark on a search for a new CEO who will be tasked with reviving the
company’s fortunes following two years of tough trading that resulted in
losses.
Gijima’s CEO Jonas Bogoshi has quit after five years at the
helm and will leave the company at the end of December‚ Gijima announced on
Wednesday after releasing its results for the year ended June.
“I have given myself five years at Gijima and now the time
has come to move on‚” he said. Bogoshi has not decided on his next move but he
is keen to remain in the technology sector‚ he said.
An industry analyst said Bogoshi’s resignation came as a
surprise as he was expecting him to stay on for a year or so to see “the fruits
of his labour” after spending the past 18 months fixing the business.
“All the ground work has been done now for the new CEO who
will not have to make tough decisions like retrenchments. But things are tough
for Gijima and there is still scepticism as to whether all the restructuring
and implementation of a new business model that have been made will lead to
profitability next year‚” the analyst said.
Bogoshi has acknowledged that the company had challenges
that were characterised by the loss of two key contracts.
The company moved swiftly to restructure the business and
reposition itself for the future growth. During the year to June‚ Gijima lost
two key contracts with Absa and the police. The restructuring included the retrenchments
of about 700 people. Of the 700‚ about 180 employees were absorbed by Absa when
it took some of the technology functions that were outsourced to Gijima back in
house. The company also reorganised its business units and implemented a new
business model. “The business is now on a growth path‚” he said.
The company expects savings of R4.5m annually as a result of
the restructuring.
“We have implemented the new structure and the business
model has been altered to reflect an organisation where client centricity is
the primary focus‚” said Bogoshi.
Gijima has also sold its non-core asset‚ MineRP business‚
for R175m to a consortium that also includes the company’s management.
The analyst said that the sale of MineRP would boost the
company. “I think that without the cash injection from the sale‚ Gijima would
have been treading dangerously but they are a lot more comfortable now‚” he
said.
Gijima’s full year revenue was down slightly to R2.53bn.
Earnings before interest‚ tax‚ depreciation and amortisation ended the year at
a loss of R517 000. But the company managed to reduce headline loss per
ordinary share to 5.27c from a loss of 21.73c.
The company’s performance for the year was significantly
impacted by the cost of establishing its new business model‚ the loss of the
two significant contracts‚ as well as the cost of the internal restructuring
programme.
It now plans to develop new generation services in areas
such as cloud computing and mobile applications.
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