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Govt deal hits Gijima results

Aug 23 2011 08:17

Company Data

Gijima Group Limited [JSE:GIJ]

Last traded 0.64
Change 0.03
% Change 0.05
Cumulative volume 11879
Market cap 126.99m

Last Updated: 17/04/2014 at 12:46. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Information, communication and technology (ICT) services group Gijima AST [JSE:GIJ] on Tuesday reported a diluted headline loss per share of 21.65c for the year ended June 2011 from headline earnings per share of 16.37c a year ago.

The group said its full year performance had been impacted by the settlement with department of home affairs in the first half of R373.9m.

The board has elected to suspend the payment of dividends for the time being and will continue to review the financial position of the group and is committed to the continuation of dividend payments as soon as conditions allow.

"Results for the financial year ended 30 June 2011 have been negatively affected by the financial impact of the dispute with the department of home affairs (DHA) on the Who Am I Online (WAIO) contract. We believe the settlement with the DHA was the best solution possible for both parties, as it is important for our relationships with the Government and clients alike," it said.

The dispute with the DHA had a severe impact on Gijima's performance, not only in terms of the settlement expenses and loss of revenue from the WAIO contract itself over this period, but also on the company's ability to trade optimally under the overhang of the impasse that has now been resolved. No revenue was recorded on the WAIO contract during the financial year, it added.

Revenue reduced by 12.8% to R2.566bn, with earnings before interest, tax, depreciation and amortisation (Ebitda) reflecting a loss of R211.8m, which includes settlement expenses of R373.9m after Ebitda of R285.7m a year ago.

The Managed Services Division achieved an 8% revenue growth as a result of improvements in the Distributed Computing, Unified Communications and Hosting environments. Strong margin improvements owing to a favourable services mix, coupled with an optimisation drive, resulted in a 36% growth in profits.

Looking ahead, Gijima said it has restructured over the last seven months and expects conditions to remain difficult for the foreseeable future.
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