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Gijima to start search for new CEO

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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