gijima-ast merger pays off says boss
Listed technology group GijimaAst more than doubled its profit margin despite recent rumours of unrest and fraud within the company.
The company recorded profit after tax of R42million for the six months to the end of December last year.
This was a 190,07percent increase on the previous corresponding period, boosted mainly by the company's professional services division.
Jonas Bogoshi, GijimaAST chief executive, said: "Our recent performance shows that the decision to merge Gijima and AST in 2005 was a good one.
"We intend to grow even further as we continue to reduce costs and boost revenues."
GijimaAst's recent performance was also boosted by the R2billion tender it was awarded by Home Affairs to implement the "Who am I online" project, which will see the department handle all transactions in a paperless environment. The contract was awarded in October last year and is expected to be ready in 2010. GijimaAst will begin the rollout within the next month.
The company was also awarded a R122million contract to provide a network for Anglo Platinum's mines and refineries.
Corrie Froehlich, head of Frost and Sullivan's ICT practice, said: "In the span of three years, GijimaAst has established itself as an accomplished home-grown ICT company."
The company's strong performance, however, was marred by anonymous allegations of low staff morale, fraudulent alteration of financial performance and dismissal of four board members over the weekend.
Malcolm McDonald, chairman of GijimaAst's audit committee, said: "These accusations are very damaging and it's unfortunate that they have come at this time."
The company was accused of dismissing four directors from its board, inflating the revenue by R200million and overcharging major clients.
"The JSE clearly stipulates that if there are any changes to the board, a company must send a statement to the public about its intentions to do so, and we have not done anything of the sort," McDonald said.
The company has secured more than 70 contracts for this year. Some of the major clients include the Airports Company of South Africa and Total.