JSE-listed IT services firm GijimaAst pulled in over R1 billion in revenue in the six months to end-December, despite once-off acquisition costs.
In a statement to shareholders this morning, the company says the internal realignment it started last year is almost complete and is starting to deliver benefits, with a 31% increase in operating profit of R31.9 million, from a year-on-year figure of R24.3 million.
However, GijimaAst's operating profit took a knock, with once-off costs relating to its acquisition of Absa's 30% minority holding in AST Distributed Technology Services (DTS), in September 2006.
Cost savings
<B>Fast figures:</B>
GijimaAst's six-month results
Year-on-year figures in brackets
Revenue: R1bn (R879m)
Operating profit: R31.9m (R24.3m)
Net profit: R14.47m (R18.3m)
HEPS: 1.16c (0.95c)
EPS: 1.20c (1.05c)
Cash-on-hand: R170.7m (R125m)
Current assets: R630.7m (R507.6m)
Current liabilities: R431.8m (R434.8m)
CEO John Miller says: "Although we incurred once-off costs amounting to R25.6 million associated with the integration of our infrastructure services businesses, ongoing annual cost savings exceeding R17.6 million have been unlocked."
Stripping out these costs and an exceptional tax charge on dividends would have brought headline earnings of 3.51c per share for the first six months of the financial year, compared to the reported 1.16c, which was up from 0.95c despite the once-off integration costs.
Hopeful
Miller is optimistic about the company's prospects going forward. "Our confidence is based on our ability to compete on an equal footing in this highly competitive market."
However, while projects are on the increase, boding well, the company says the market remains aggressive with clients exerting downward pressure on pricing and acute skills shortages in specialist sectors putting pressure on costs.
The company restructured its balance sheet with five-year debentures of R256 million, which it expects to aid growth going forward. Despite the cash paid to acquire Absa's share of DTS, the company has R169.3 million in cash-on-hand.
GijimaAst is confident of public sector and large enterprise contracts filtering through in the immediate future and spent R10.7 million on income-generating computer equipment.
GijimaAst's share was trading down 1.1%, at 90c, just after the market opened this morning.
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