GijimaAst today reported a return to profits in its results for the year ended 30 June 2006. Reported profit of R22.8 million, attributable to equity holders of the parent company, was recorded compared to a loss of R64.8 million a year ago.
With a R91.5 million increase in cash flow from operating activities, to R94.1 million (2005: R2.5 million), the group also demonstrated its ability to translate operating profits into net cash which increased by R117.2 million.
"The return to profitability was enabled by our disciplined approach to running our business. We successfully halted the revenue and margin declines reported in previous periods, recording 24.4% revenue growth to R1.95 billion," explains John Miller, Chief Executive Officer, GijimaAst. "However, revenue growth was curtailed by ongoing pressure from our client base to reduce costs for commoditised outsourcing, as well as delays in major public sector contract awards where we are awaiting results."
During the year, the group focused on transformation at all levels, while attracting and retaining the top people in the industry to run the business. GijimaAst also continued to invest in its offering to maintain its leadership. The recent award of a new five-year contract to run Absa Bank`s IT infrastructure attests to this success.
GijimaAst`s empowerment credentials are now acknowledged as the best in the ICT services industry. The group was rated AA by Empowerdex and eighth out of the top 200 JSE listed companies in a recent Financial Mail survey on BEE in major companies.
"Since the merger, we have made enormous progress in changing the demographics of our workforce from 15% black in 2005 to 30% at the end of the financial year", says Miller. "In addition, two of the top three operational management jobs are now held by black professionals. Chris Malakwane, who runs our Competency Centres, and Livingstone Chilwane, in charge of our Public Sector business unit, are both at the coal face and bear the full responsibility and accountability for profitably running their divisions."
Two noteworthy post balance sheet events were concluded by the group. A debtors securitisation, announced on 2 August 2006, enabled it to settle short-term interest-bearing debt and add a further R133 million to cash holdings. In addition, the group advised shareholders on 21 September 2006 that it had acquired the remaining 30% shareholding in DTS, previously owned by Absa. This gives GijimaAst the opportunity to introduce further operating efficiencies following the merger. The group will fine-tune its offering to meet clients` convergence requirements.
"These results are the culmination of a number of strategies during the past three years," concludes John Miller, Chief Executive Officer, GijimaAst. "The merger of Gijima and AST has been in effect for just over a year and the integration is complete, with the exception of a few areas where we can extract further efficiencies. Our balance sheet is healthy and we have good cash balances to fund profitable revenue growth and deliver positive returns to shareholders."
Please note: The analyst presentation will take place today, 27h September 2006, at the Sandton Sun Hotel at 12:00 for 12:30 (noon).
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