A trading update from GijimaAst has helped boost market confidence that the embattled technology group is on the mend, although the guidance is slightly lower than analysts expected.
Late yesterday, GijimaAst said headline earnings per share for the year ended 30 June were expected to improve to between 14.8c and 16.5c. Analysts had been hoping for 16.8c per share.
The group said the basic loss per share would improve to between 18.2c and 22.8c. This is based on a weighted average of 315.6 million shares in issue.
In February, GijimaAst completed a rights issue, increasing its share issue by 964.7 million. The exercise effectively recapitalised the group.
One JSE analyst says the trading update, while less than expected, was not a disappointment.
"If they can demonstrate that improved operational profitability and the outlook for the 2006 financial year looks set to keep improving, then confidence should be restored," he says.
Following the release of the trading update, the GijimaAst share price rose 4c to trade at 66c, but this morning it pulled back to 64c.
In May, GijimaAst was forced to restate its December interim results. This was at the request of the JSE, after consulting the GAAP (generally accepted accounting practice) monitoring panel. It told the group to republish the results to classify the R116.75 million to underwrite a rights offer as debt and not equity.
"It was a technical issue and basically a storm in a tea cup," the analyst says.
GijimaAst plans to publish its year-end results on 30 August.
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