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Anaudited Group interim report for the period ended 31 December 2012
Gijima Group Limited
(previously Gijima Ast Group Limited)
Registration number 1998/021790/06
Share code: GIJ ISIN: ZAE000147443
("Gijima" or "the Group" or "the Company")
Unaudited Group interim report for the period ended 31 December 2012
Condensed consolidated income statement
for the period ended 31 December 2012
Unaudited Restated Restated
31 December 31 December 30 June
2012 2011 2012
(six months) (six months) (12 months)
Note R'000 R'000 R'000
Continuing operations
Revenue 911 207 1 186 508 2 219 239
Other operating income 400 2 636 8 621
Income 911 607 1 189 144 2 227 860
(Loss)/earnings before interest, tax, depreciation
and amortisation charges (EBITDA) (100 260) 56 742 (26 319)
EBITDA before reclassification of net investment (97 764) 56 742 (26 319)
Reclassification of currency translation on
net investments (2 496)
Depreciation and amortisation charges (23 100) (23 356) (45 777)
Operating (loss)/profit 3 (123 360) 33 386 (72 096)
Financial income 1 010 3 670 6 353
Financial expenses (19 476) (15 730) (29 314)
Net financial expense (18 466) (12 060) (22 961)
(Loss)/profit before tax (141 826) 21 326 (95 057)
Income tax 35 621 (8 387) 25 444
(Loss)/profit for the period from
continuing operations (106 205) 12 939 (69 613)
Discontinued operations
Profit from discontinued operation, net of tax 82 471 15 628 19 023
Net loss/(profit) before reclassification of currency
translation of net investments and profit on
disposal of business (9 529) 15 628 19 023
Profit on disposal of business 63 479
Reclassification of currency translation of net
investments due to disposal of business 41 332
Tax effect on adjustments (12 811)
(Loss)/profit for the period (23 734) 28 567 (50 590)
Total (loss)/profit attributable to:
Owners of the parent (24 411) 29 800 (50 785)
Non-controlling interest 677 (1 233) 195
(23 734) 28 567 (50 590)
Weighted average number of shares (000's) 961 565 961 565 961 565
Diluted number of shares (000's) 961 565 961 565 961 565
Number of shares in issue (000's) 961 565 961 565 961 565
Earnings per share
Basic (loss)/earnings per ordinary share (cents) (2,54) 3,10 (5,28)
Diluted (loss)/earnings per ordinary share (cents) (2,54) 3,10 (5,28)
Headline (loss)/earnings per ordinary share (cents) (10,58) 3,11 (5,27)
Diluted headline (loss)/earnings
per ordinary share (cents) (10,58) 3,11 (5,27)
Calculation of headline earnings/(loss)
(Loss)/profit attributable to owners of the parent (24 411) 29 800 (50 785)
Profit on disposal of business (63 479)
Reclassification of currency translation on
net investments (38 836)
Tax effect of reclassification on net investments 24 819
Loss on sale of property, plant and equipment 199 175 168
Tax effect (56) (49) (47)
Headline (loss)/earnings (101 764) 29 926 (50 664)
Earnings per share continuing operations
(Loss)/profit attributable to:
Owners of the parent (106 882) 14 172 (69 808)
Non-controlling interest 677 (1 233) 195
(106 205) 12 939 (69 613)
Basic (loss)/earnings per ordinary share (cents) (11,12) 1,47 (7,26)
Diluted (loss)/earnings per ordinary share (cents) (11,12) 1,47 (7,26)
Headline (loss)/earnings per ordinary share (cents) (9,59) 1,49 (7,25)
Diluted headline (loss)/earnings per ordinary share
(cents) (9,59) 1,49 (7,25)
Calculation of headline (loss)/earnings
(Loss)/profit attributable to owners of the parent (106 882) 14 172 (69 808)
Reclassification of currency translation
on net investments 2 496
Tax effect on reclassification on net investments 12 009
Loss on sale of property, plant and equipment 188 152 98
Tax effect (53) (43) (27)
Headline (loss)/earnings (92 242) 14 281 (69 737)
Condensed consolidated statement of comprehensive income
for the period ended 31 December 2012
Unaudited Unaudited Audited
31 December 31 December 30 June
2012 2011 2012
R'000 R'000 R'000
(Loss)/profit for the period (23 734) 28 567 (50 590)
Other comprehensive income
Currency translation differences for foreign operations 39 361 2 849 2 844
Currency translation on the net investments
for foreign operations 13 342 10 861 11 496
Reclassification of currency translation on investments
for foreign operations (39 190)
Revaluation of property, plant and equipment 3 839
Income tax on other comprehensive income (452) (4 925) (34)
Total comprehensive (loss)/income for the period (10 673) 37 352 (32 445)
Total comprehensive (loss)/income attributable to:
(Loss)/profit attributable to owners of the parent (11 350) 38 585 (32 640)
Profit/(loss) attributable to non-controlling interest 677 (1 233) 195
(10 673) 37 352 (32 445)
Notes to the condensed consolidated financial statements
1 Statement of compliance
The condensed Group unaudited interim financial statements are prepared and presented in accordance with the
JSE Limited (JSE) Listings Requirements; the South African Companies Act (Act 71 of 2008), as amended; and the
recognition and measurement requirements of International Financial Reporting Standards and the presentation and
disclosure requirements of International Accounting Standard 34 and the Financial Reporting Guide as issued by the
Accounting Practices Committee of SAICA.
These condensed consolidated financial statement's do not include all of the information required for full annual
financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at
and for the year ended 30 June 2012.
The condensed unaudited consolidated financial statements have been prepared by Pierre Joubert, CA(SA), the Group
Manager, Financial Accounting.
These condensed unaudited consolidated annual financial statements were approved by the Board of Directors on
22 March 2013.
2 Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated interim financial statements are the
same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2012.
Unaudited Restated Restated
31 December 31 December 30 June
2012 2011 2012
R'000 R'000 R'000
3 Operating (loss)/profit
The following material items have been included in the
calculation of operating profit:
Continuing operations
Exchange rate gains/(losses) on translation
of foreign currency 532 (8 503) (8 972)
Exchange rate loss on reclassification of currency
translation on net investments (2 496)
Reversal of an accrual 35 970 35 970
Loss on sale of property, plant and equipment (188) (152) (98)
Discontinued operations
Exchange rate losses on translation of foreign currency (1 063) (1 006) (2 605)
Exchange rate gain on reclassification of currency
translation on net investments 41 332
Profit on disposal of business 63 479
Losses on sale of property, plant and equipment (11) (23) (70)
101 585 26 286 24 225
4 Disposal of subsidiaries
In November 2012 Gijima sold its mining technology and consulting businesses (MineRP Businesses). The MineRP
Businesses was not classified as a discontinued operation at 30 June 2012, and the comparative condensed
consolidated income statements have been restated to show the discontinued operation separately from
the continuing operations. The Board and Executive Committee committed to a plan to sell the MineRP Businesses
early in the 2013 financial year and was subject to key approvals for the sale to be valid such as the Competition
Commission and JSE approval. All approvals were completed on 9 November 2012.
31 December 31 December 30 June
2012 2011 2012
R'000 R'000 R'000
Effect of discontinued operation on the condensed
consolidated income statement:
Revenue 86 017 150 117 310 829
Expenses (102 568) (129 945) (287 826)
Results from operating activities (16 551) 20 172 23 003
Net financial income 107 502 771
Results from operating activities, after financial
expenses (16 444) 20 674 23 774
Taxation 6 915 (5 046) (4 751)
Results from operating activities, net of tax (9 529) 15 628 19 023
Gain on sale of business 63 479
Reclassification of currency translation on net investments 41 332
Taxation on reclassification of net investments (12 811)
Profit for the period 82 471 15 628 19 023
Basic earnings per ordinary share (cents) 8,58 1,63 1,98
Diluted earnings per ordinary share (cents) 8,58 1,63 1,98
Headline (loss)/earnings per ordinary share (cents) (0,99) 1,63 1,98
Diluted headline (loss)/earnings per ordinary share
(cents) (0,99) 1,63 1,98
Cash flows from discontinued operations:
Net cash generated from operating activities 15 559 31 460 8 315
Net cash generated from/(used in) investing activities 151 134 (3 275) (5 803)
Effect on cash flows 166 693 28 185 2 512
Effect of discontinued operation on the condensed
consolidated statement of financial position:
Property, plant and equipment (7 121)
Intangible assets (1 387)
Deferred tax assets (5 169)
Inventories (757)
Trade and other receivables (48 257)
Current tax assets (7 071)
Cash and cash equivalents (22 679)
Deferred tax liabilities 70
Trade and other payables 31 618
Currency translation differences (50 768)
Net assets and liabilities (111 521)
Consideration received, satisfied in cash 175 000
Cash and cash equivalents disposed of (22 679)
Net cash inflow 152 321
Consideration received 175 000
Net assets and liabilities (111 521)
Profit on disposal of business 63 479
Recycling of net investment on disposal of business 41 332
Profit before tax on disposal of business 104 811
Tax on recycling of net investment on disposal of business (12 811)
Profit on disposal of business 92 000
5 Contingent liabilities
At 31 December 2012 the Group had contingent liabilities in respect of registered performance bonds, bank lease and
other guarantees to the value of R17,5 million (30 June 2012: R28,8 million).
6 Segment analysis
From 1 July 2012 Gijima formally changed to a new reporting structure which comprises mainly System Engineering
and Services which is a change from previously reported Professional and Managed Services. As a result the
segmental analysis have been restated.
Condensed consolidated segmental analysis
for the period ended 31 December 2012
Unaudited Restated Restated
31 December 31 December 30 June
2012 2011 2012
R'000 R'000 R'000
Revenue
Systems Engineering 109 280 278 269 431 593
Services 569 012 738 480 1 433 171
Discrete Solutions 240 789 183 529 381 557
MineRP Businesses 86 017 150 117 310 829
1 005 098 1 350 395 2 557 150
Elimination of discontinued operations (86 017) (150 117) (310 829)
Internal revenue adjustment (7 874) (13 770) (27 082)
Consolidated revenue 911 207 1 186 508 2 219 239
Segment results
Systems Engineering (132 853) (574) (60 061)
Services 8 591 54 352 21 156
Discrete Solutions 21 753 11 891 29 407
MineRP Businesses 82 335 11 422 901
MineRP Businesses segment results (22 476) 11 422 901
Reclassification of currency translation on net investments
as part of disposal of business 41 332
Profit on disposal of business 63 479
Consolidated segment results (20 174) 77 091 (8 597)
Discontinued operations (89 323) (21 178) (25 608)
Elimination of discontinued operations 15 488 (21 178) (25 608)
Elimination of reclassification of currency translation
on net investments as part of disposal of business (41 332)
Elimination of profit on disposal of business (63 479)
(109 497) 55 913 (34 205)
Unallocated expenses (32 329) (34 587) (60 852)
Other corporate expenses (11 899) (14 024) (28 919)
Reclassification of currency translation of net investments (2 496)
Exchange rate gains/(losses) on translation 532 (8 503) (8 972)
Net financial expense (18 466) (12 060) (22 961)
Consolidated (loss)/profit before tax of continuing operations (141 826) 21 326 (95 057)
Condensed consolidated statement of financial position
as at 31 December 2012
Unaudited Unaudited Audited
31 December 31 December 30 June
2012 2011 2012
R'000 R'000 R'000
ASSETS
Non-current assets 401 538 354 450 408 276
Property, plant and equipment 77 013 84 657 89 828
Intangible assets 131 245 147 965 141 799
Trade and other receivables 18 213
Deferred tax assets 193 280 121 828 158 436
Current assets 550 690 820 538 696 535
Inventories 39 195 27 602 34 459
Trade and other receivables 421 988 591 857 539 887
Current tax assets 436 187 919
Cash and cash equivalents 89 071 200 892 121 270
Total assets 952 228 1 174 988 1 104 811
EQUITY AND LIABILITIES
Equity attributable to owners of the parent 221 552 304 370 232 902
Non-controlling interest (2 333) (4 438) (3 010)
Non-current liabilities 336 677 225 499 371 887
Interest-bearing liabilities 256 501 152 291 301 980
Operating lease liability 18 697 20 761 19 336
Amounts due to vendors 1 019
Deferred tax liabilities 61 479 51 428 50 571
Current liabilities 396 332 649 557 503 032
Trade and other payables 365 378 480 809 464 359
Short-term borrowings 150 000
Operating lease liability 2 066 5 294 4 451
Provisions 28 888 2 158 28 020
Bank overdrafts 1 792 4 235
Amounts due to vendors 1 613 1 967
Current tax liabilities 7 891
Total equity and liabilities 952 228 1 174 988 1 104 811
Condensed consolidated statement of cash flows
for the period ended 31 December 2012
Unaudited Unaudited Audited
31 December 31 December 30 June
2012 2011 2012
R'000 R'000 R'000
Cash flows from operating activities
Cash (used in)/generated from operations before
working capital changes (114 101) 94 293 36 120
Working capital changes 21 866 42 521 48 014
Net financial expense (25 051) (11 276) (13 690)
Interest received 1 169 4 522 7 214
Interest paid (26 220) (15 798) (20 904)
Dividend paid
Tax paid (5 898) 10 866 3 300
Net cash (used in)/generated from operating activities (123 184) 136 404 73 744
Cash flows from investing activities
Purchase of intangible assets (1 097) (3 433) (7 577)
Purchase of property, plant and equipment (8 610) (18 222) (33 172)
Decrease in amounts due to vendors (1 915) (1 686) (1 686)
Proceeds from the disposal of business 175 000
Cash and cash equivalents from disposal of business (22 679)
Net cash generated from/(used in) investing activities 140 699 (23 341) (42 435)
Cash flows from financing activities
Repayment of short-term borrowings (479) (438) (150 749)
Repayment of interest-bearing borrowings (45 000)
Increase in short-term loans 150 000
Increase in finance liability
Net cash used in financing activities (45 479) (438) (749)
Net (decrease)/increase in cash and cash equivalents (27 964) 112 625 30 560
Cash and cash equivalents at the beginning of the period 117 035 86 475 86 475
Cash and cash equivalents at the end of the period 89 071 199 100 117 035
Condensed consolidated statement of changes in equity
for the period ended 31 December 2012
Share Share Distributable Non-distributable Non-controlling Total
capital premium reserves reserves Total interest equity
Group R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 July 2011 961 641 710 (313 082) (64 047) 265 542 (3 205) 262 337
Profit/(loss) for the period 29 800 29 800 (1 233) 28 567
Other comprehensive income
Currency translation difference 2 849 2 849 (15 517)
Currency translation on net investments (4 925) 10 861 5 936 5 936
Total comprehensive income for the period 24 875 13 710 38 585 (1 233) 37 352
Transactions with owners, recorded directly in equity
Share-based payment transactions 243 243 243
Total transactions with owners 243 243 243
Balance at 31 December 2011 961 641 710 (287 964) (50 337) 304 370 (4 438) 299 932
Loss for the period (80 585) (80 585) 1 428 (79 157)
Other comprehensive income
Currency translation differences (39) (39) (39)
Revaluation of building 3 839 3 839 3 839
Currency translation on net investments 4 925 635 5 560 5 560
Total comprehensive income for the period (75 660) 4 435 (71 225) 1 428 (69 797)
Transactions with owners, recorded directly in equity
Share-based payment transactions (243) (243) (243)
Total transactions with owners (243) (243) (243)
Balance at 30 June 2012 961 641 710 (363 867) (45 902) 232 902 (3 010) 229 892
(Loss)/profit for the period (24 411) (24 411) 677 (23 734)
Other comprehensive income/(loss)
Currency translation differences 38 909 38 909 38 909
Currency translation on net investments (25 848) (25 848) (25 848)
Total comprehensive loss for the period (24 411) 13 061 (11 350) 677 (10 673)
Balance at 31 December 2012 961 641 710 (388 278) (32 841) 221 552 (2 333) 219 219
FINANCIAL RESULTS
The Company experienced a challenging six months, with revenue from continuing operations down 23% from
the prior reporting period. This followed the loss and insourcing of two significant contracts during the second
half of the previous financial year; limited new revenue opportunities in a tough market; and top-line pressure
on a major project.
The Company has completed the implementation of its new structure, and its business model has been altered
to reflect an organisation where client-centricity is the primary focus. However, the new model has not yet
yielded the desired levels of revenue generation.
The loss from continuing operations incurred during the period is a direct consequence of the pressure on
the Company's revenue line. The implementation of initiatives to fix the Company's cost base commenced in
November 2012 and is expected to be finalised before the end of the current financial year.
The Company has incurred expenditure of some R47 million during the interim reporting period on a major
project without recognising revenue. Differences over pricing methodology and scoping on this project have
now been resolved with our customer.
The disposal of the Company's mining technology and consulting businesses (MineRP) to a consortium led by
RMB Corvest Proprietary Limited, a subsidiary of RMB Private Equity Proprietary Limited, was concluded on
12 November 2012 for a cash consideration of R175 million.
The change in the Company operating model has resulted in a shift in the primary reporting view from
Professional and Managed Services to that of Systems Engineering and Services. The Systems Engineering
division houses the Company's various project environments, including custom and packaged solutions, as well
as infrastructure projects. The Services division is responsible for the various support environments, including
field operations, business applications, infrastructure support and the integrated service centre. All other
focused businesses are grouped under our Solutions division, including our training and placement business,
our voice business, our Namibian operation as well as MineRP up to the date of its disposal.
The Systems Engineering division experienced a disappointing six months and performed well below
expectation. Revenue dropped by 61% and a loss of R132,8 million was recorded against last year's break-
even level. The results of Systems Engineering were significantly impacted by the major project referred to above
that did not generate revenue during the period under review. New business in this environment was hampered
by tough market conditions.
Revenue of the Services division ended 24% lower than last year, predominantly as a result of the loss and
insourcing of two significant contracts during the second half of the previous financial year. Margins in this
environment remained depressed. These are however expected to improve as the cost base is fixed during
the second half of the year to align with the revenue generated by the Services division. The performance
notwithstanding, the year was also marked by significant contract renewals, ensuring that our traditionally high
levels of annuity business is maintained.
The Solutions division (continuing operations) delivered an excellent performance and achieved revenue
growth of 31% from last year. Operating profit of this division improved by 83%. The training and placement
business reported a solid performance, growing both its revenue and profit lines from last year. Our voice
business performed exceptionally well, re-affirming the strategy to move the business to the Solutions division
to allow focus on its core competencies. Our Namibian operation in addition disclosed excellent growth and
profitability for the six-month reporting period.
The main features of the Company's results from continuing operations are as follows:
31 December 2012 31 December 2011
(Six months) (Six months) Variance
Continuing operations R'000 R'000 % decrease
Revenue 911 207 1 186 508 (23)
Operating (loss)/profit (123 360) 33 386 (469)
Headline (loss)/earnings per share (9,59) 1,49 (746)
(Loss)/earnings per share (11,12) 1,47 (854)
No dividend has been declared for the period.
Investors and shareholders are referred to the cautionary announcement dated 28 March 2013 regarding the
intended recapitalisation of Gijima through a fully underwritten rights offer in order to strengthen the balance sheet
of Gijima and ensure sufficient capitalisation to meet its funding covenants and ongoing trading requirements.
On behalf of the Board
RW Gumede EA Wilton CJH Ferreira
Non-executive Chairman Interim Chief Executive Officer Chief Financial Officer
28 March 2013
Directors: Sponsor:
RW Gumede (Non-executive Chairman)* RAND MERCHANT BANK
PJ Bogoshi (Chief Executive Officer)^ (A division of FirstRand Bank Limited)
CJH Ferreira (Chief Financial Officer) Registered Office:
EA Wilton (Interim Chief Executive Officer)+ 47 Landmarks Avenue, Kosmosdal, Samrand, South Africa
Dr MHR Bussin*, M Macdonald*, JE Miller*#, AFB Mthembu*, (012) 675 5000
JCL van der Walt*, AH Trikamjee*, N Fakude* Transfer Secretaries:
* Non-executive Link Market Services South Africa Proprietary Limited
^ Resigned 26 September 2012, effective 31 December 2012 (Registration number 2000/007239/07)
+ Appointed 9 October 2012 as Interim Chief Executive Officer 13th Floor, Rennie House
and alternate director 19 Ameshoff Street, Braamfontein, 2001
# Resigned 26 November 2012 (PO Box 4844, Johannesburg, 2000)
Company Secretary: Gijima Group Limited
Ithemba Governance and Statutory Solutions (previously Gijima Ast Group Limited)
Proprietary Limited Registration number 1998/021790/06
Monument Office Park, Block 5 Share code: GIJ ISIN: ZAE000147443
Suite 102, 79 Steenbok Avenue, Monument Park, 0181 ("Gijima" or "the Group" or "the Company")
www.gijima.com/IR_2012
Date: 28/03/2013 04:28:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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