Black-owned IT services company Gijima is quietly forging ahead with its turnaround strategy, almost a year after the once glamorous company's de-listing from the Johannesburg Stock Exchange (JSE).
Gijima left the stock exchange in May last year following a 15-year dance with the bourse. This came after the services company - then the worst performing stock on the JSE - failed to raise funds through a R100 million rights issue in late 2014 to fund the struggling business.
The company was unable to comply with financial agreements related to R213 million in borrowings because of tough trading conditions.
In its heyday, in April 2010, Gijima's share price reached almost R50, but this was just before the Department of Home Affairs cancelled the multibillion-rand contract in a surprising letter that stated the deal was "invalid". It subsequently locked Gijima staff out of its Pretoria headquarters, and the state attorney had to intervene before staff members were let back in.
Soul-searching
In a recent interview with ITWeb, CEO Eileen Wilton said since going private, the company has done a lot of soul-searching in a bid to get back to its glory days.
However, she pointed out there are no immediate plans to re-list the company on the JSE.
"The de-listing per se has not created new major challenges; it really helps to be 100% black-owned, given the BBBEE new emphasis by the DTI [Department of Trade and Industry] on black ownership," Wilton said.
"We are ensuring current and prospective customers are updated regularly on progress in the turnaround."
According to Wilton, the turnaround is progressing satisfactorily, despite tough economic conditions. Gijima will be able to confirm the completion of this turnaround strategy in the next few months, she added.
"The turnaround has paid off, and we have been able to focus on getting the financial operating model of the company in line. We have been able to focus on our funding arrangements as well as funding partners and entered into new arrangements, which ensure the turnaround is supported by the underlying arrangements."
She pointed out the company has focused on its existing clients and their value propositions to ensure good value for money. Gijima has also focused on having sustainable and new offerings developed to ensure relevance to current and future clients, she noted.
"We are a new Gijima since the turnaround. 'New' means a new leadership team; we have refreshed and introduced new offerings. We are focused and driven to provide clients with relevant, value for money offerings that contribute to their success.
"In this vein, it is, thus, our goal to continue with ensuring we have good offerings that execute well for our clients. And through this, we ensure the continued financial stability of Gijima," Wilton said. "Gijima, as a 100% black-owned, South African company will continue to drive transformation in Gijima and in our ICT sector."
Ideal partner
As part of its turnaround, Gijima recently entered into a partnership with IBM and Vodacom to open a new cloud data centre in SA.
"The partnership with IBM and Vodacom is an extension of Gijima's hybrid cloud strategy and is the culmination of two years of hard work as part of our turnaround strategy. Gijima is the ideal partner for this service as we already have the system and SAP integration skills as part of our existing solutions offering," Wilton notes.
"Further, we have successfully completed our turnaround and are now embarking on a new strategy underpinned by new offerings for our clients. The IBM cloud platform is the first of other announcements to be made this year."
She adds cloud investment is critical for SA at this stage. "In a time where there is a lot of negativity, we, through our formal financial arrangements with IBM and Vodacom, have ensured significant investment in the country."
According to Wilton, Gijima is already working on its offering to the market and announcements will be made in due course.
"The new Gijima is focused, and knows what it has to do to achieve success in this economy now. Through this fierce focus, our commitment to South Africa, our clients, our staff and our partners, we will ensure Gijima continues to create a proud South African legacy," she concluded.
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