Stock in JSE-listed Gijima lost 2.22% yesterday, after the company said several events had taken place during the year that would have a material impact on its results for the year to June.
The company, which is entering a closed period, yesterday issued an announcement and pointed out that, since its interim results were issued in February, it had lost half an Absa deal and a police desktop contract through the State IT Agency.
Gijima's announcement saw its stock lose 2.22%, or 1c, to close at 44c. Its 52-week low was seen on 13 June, when its shares closed at 38c, while its 52-week high was 73c, on 14 November last year.
“Despite the challenges in the 2012 financial year, management is confident that the remedial actions taken have positioned the company for a solid and profitable performance in the 2013 financial year,” the company says.
Gijima has invested to position the group for “stability, consolidation and growth,” it says.
Hard hit
For the year to June 2011, Gijima reported revenue of R2.6 billion, down from R2.9 billion. After settling a dispute with the Department of Home Affairs over the “Who am I Online” contract, it reported a net loss of R208.7 million, compared with a R154 million gain in the previous year.
This year's results will reflect the costs of completing its client centricity model, which will lead to a new structure to better position Gijima. The costs include recruitment fees for IT executives to drive various initiatives, retrenchment costs and the cost of external advisory teams.
The cost of cutting back its workforce will also be reflected in its results, Gijima says. The group's staff numbers are expected to be trimmed by about 700, from 3 902, once it is completed.
In May, Gijima said it would trim between 8% and 12% of its R1 billion-a-year staff bill through retrenchments, as it faces declining revenue because of lost deals and increasing costs. Of the 700, some 200 people have been retrenched and the balance moved to Absa, after it in-sourced more than half the contract it previously had with Gijima.
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