Listed ICT services provider GijimaAst said despite the current economic situation, it will grow its revenue over the next two years.
At a press conference held yesterday, the company revealed its strategy for 2009. By aggressively focusing on its service offerings and increasing human capital - which it terms “the realignment of its offering to the market” - the company believes it can continue on its growth trajectory.
“That part of the business is important, because it's where the profit margins are,” said CEO Jonas Bogoshi, in reference to the focus on services. The company has also identified other key focus areas, as well as areas of improvement.
“In terms of managed services, we want to be number one or number two in systems integration. That's what we are driving, to make sure we differentiate GijimaAst from everyone else,” said Bogoshi.
Following the recent release of its interim results, the company said it has been reassured by its performance. The ICT services provider recorded a 25% increase in revenue and an EBITDA increase of 67%, before adjustments for exchange rate gains and losses. The group also reported the bulk of its revenue comes from services (80%) and 20% from product sales. Those percentages are split into its managed services (49%) and professional services (51%) divisions.
Thoko Mnyango, marketing, communications and transformation managing executive, said following its results, the company will prioritise shareholder value by focusing on profitable growth.
“GijimaAst continued with the standardisation of its business processes; this included an investment of R11.3 million in the upgrade of our SAP ERP system, the implementation of our ITIL unified framework for service management, the upgrade of our project management office, and we invested quite specifically on leadership development within the ranks.”
Feeling the pinch
The company said 43% of its business is derived from contracts in the public sector, another 18% from mining, 16% from financial services and the rest from manufacturing, retail and hospitality and other sectors. As government is only likely to feel the impact of the financial crisis after industries such as mining, manufacturing and the financial sector, the group says its large system integration projects in the public sector will help it through the financial downturn.
“The heritage in mining and manufacturing serves us well, but doesn't exempt the company from the financial situation,” Bogoshi said. He previously stated that the global financial situation had negatively affected the company's mining division (GMSI), saying: “This business has not performed at all. Revenue is exceptional, but profit is disappointing.”
Pieter Nel, business unit executive for GMSI, said while the group has been affected by the downturn, it still maintained the loyalty of some of its biggest customers. There will be retrenchments, he said, but these people will get absorbed back into GijimaAst.
He said the focus for the unit for the next year or two will be maintaining and sustaining its current contracts. The global financial situation has meant new contracts have either been postponed or cancelled. “We are not relying on getting any new projects,” Nel said, adding that there is still a great need for the solutions that the unit provides.
Loyal clients
Bogoshi said the strength of GijimaAst lies in a loyal client base. “We are lucky because we have a very big and loyal client base. Most of them have been with us for 10 years. If you have that kind of client of base supporting you, even if you go through tough times, they support you. And if you remember the history of Ast, that has been the case. And now that we've come out of that, they continue supporting us. And that is very good for us.”
Mnyango added that the ICT services provider's longstanding relationships help it develop “vertically integrated, industry focused solutions for its clients across a broad spectrum of industries”. ICT consulting and delivery capabilities will be enhanced this year and more knowledge of systems integration and proven operating models will help it achieve its objectives for the year, she said.
But the key, she said, is in developing human capacity in the business. “We believe we're sustaining competitiveness through developing our high impact leaders and properly leveraging our human capital.”
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