Gijima defies tough climate
INFORMATION and communications technology group GijimaAST reported diluted headline earnings per share of 4.27c for the six months ended in December 2008 from 4.29c a year ago.
Revenue grew by 25percent to R1.5-billion, while earnings before interest tax depreciation and amortisation before exchange rate gains and losses was up 67percent to R129-million.
Operating profit grew to R80.16-million from R68.35-million.
The company said the 25percent increase in revenue was achieved primarily through the strong growth of 60percent in the professional services division, which secured significant new business over the period.
Cash generated from operations before working capital changes increased by 91percent as a result of improved operating performance.
Looking ahead, the group said that the ICT industry in South Africa is increasingly challenging, with client sectors, such as mining, reducing capital spend.
It is, however, projected that IT expenditure will grow at a compound annual growth rate (CAGR) of 9.7percent in the next five years, with IT services, in particular, growing at a CAGR of 11.7percent.
This is driven primarily by government infrastructure spending and technology refresh cycles.
GijimaAst said it was well positioned to weather the economic storm, due to increased public sector infrastructure spending and large annuity and services revenue streams.
The economic downturn has forced many companies to review IT expenditure and evaluate ways to be more efficient.
This augurs well for IT service providers who can innovate and can deploy alternative flexible service delivery models, it added.
The skills shortage is one of the biggest inhibitors of growth in the industry, the company said.
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