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GIJ
GIJ
Gijima Ast Group Limited - Unaudited Results For The Six Months Ended December
2005
Gijima Ast Group Limited
("GijimaAst" or "the Company")
REGISTRATION NUMBER 1998/021835/07
Share code: GIJ
ISIN: ZAE000064606
Unaudited results for the six months ended December 2005
Income Statement
for the six months ended 31 December 2005
IFRS IFRS IFRS
adjusted adjusted
31 Dec 31 Dec 30 June
2005 2004 2005
(6 (6 (12
months) months) months)
Notes R"000 R"000 R"000
Continuing operations
Revenue 879 499 736 275 1 568 783
Cost of sales (710 439) (527 952) (1 272
678)
Gross profit 169 060 208 323 296 105
Other operating 395 162 1 518
income
Administrative and (145 137) (188 156) (255 889)
other expenses
Operating profit 2 24 318 20 329 41 734
Net interest 3 1 394 5 598 (4 303)
received/(finance
cost)
Share of (35) 89 136
(loss)/profit of an
associate
Profit before tax 25 677 26 016 37 567
Income tax expense (7 403) (101 067) (86 506)
Profit/(loss) from 18 274 (75 051) (48 939)
continuing operations
Discontinued
operation
Loss for the period (1 536) (1 188) (368)
from a discontinued
operation, net of tax
Profit/(loss) for the 16 738 (76 239) (49 307)
period
Attributable to
Equity holders of 8 598 (80 214) (64 827)
GijimaAst
Minority interest 8 140 3 975 15 520
16 738 (76 239) (49 307)
Calculation of
headline earnings
Profit/(loss) 8 598 (80 214) (64 827)
attributable to
equity holders of
GijimaAst
Discontinued 1 536 1 188 368
operation
Impairment of - 20 184 32 742
goodwill
Impairment of assets - 83 076 86 416
and investments
Loss/(profit) on sale 156 (875) (4 891)
of businesses and
properties
Headline earnings 10 290 23 359 49 808
Headline earnings per 1,07 12,04 15,78
ordinary share (cent)
Fully diluted
headline earnings per
ordinary share (cent) 1,07 6,58 15,78
Basic profit/(loss)
per ordinary share
(cent)
from continuing 1,05 (40,75) (20,42)
operations
Fully diluted basic
(loss) per ordinary
share (cent)
from continuing 1,05 (40,75) (20,42)
operations
Weighted average 964 667 193 934 315 638
number of shares
(000"s)
Fully diluted number 964 667 354 780 315 638
of shares (000"s)
Number of shares in 964 667 198 759 964 667
issue (000"s)
Notes to the Income Statement
1. Basis of preparation
The Group has adopted International Financial Reporting Standards (IFRS) for the
year ending 30 June 2006. These interim results have been prepared in accordance
with IAS 34 - Interim Financial Reporting.
The financial statements for the year ending 30 June 2006 will be the Group"s
first consolidated IFRS-compliant financial statements. IFRS 1 - First-Time
Adoption of IFRS, has consequently been adopted in preparing this interim
report. Previously GijimaAst reported under South African Generally Accepted
Accounting Pactice (SA GAAP).
The accounting policies used in the preparation of this interim report are
consistent with those applied in the annual financial statements for the year
ended 30 June 2005, except for the following changes that resulted from the
mandatory adoption of new or revised standards:
IFRS 2: Share-based payments
The Group adopted IFRS 2 following the introduction of the GijimaAst Share
Linked Bonus Scheme during the period under review. The fair value of notional
shares granted to employees is recognised as an employee expense with a
corresponding increase in equity. The fair value is determined at grant date and
expensed over the period during which the employees become unconditionally
entitled to the equity instruments (the vesting period). The fair value of the
instruments granted is measured using the Black Scholes valuation methodology,
taking into account the terms and conditions upon which instruments are granted.
The first notional shares under the GijimaAst Share Linked Bonus Scheme were
granted on 20 December 2005 and the adoption of IFRS 2 had no impact on previous
financial periods.
IFRS 3: Business Combinations
The Group adopted IFRS 3 prospectively in its reported results for the twelve
months ended 30 June 2005. Amortisation of previously recognised goodwill ceased
at 30 June 2004 and goodwill balances are subjected to annual impairment
testing. The purchase price allocation of the Gijima businesses acquired in May
2005 is reflected at provisional values. Adjustments to these provisional values
will be finalised by 3 May 2006 as permitted by IFRS 3.
IFRS 5: Non-current Assets Held For Sale and Discontinued Operations
The Group has applied IFRS 5 in accordance with the transitional provisions
prospectively from 1 January 2005. In October 2005 the Group decided to
discontinue the operations of its local strategic consulting business. Strategic
consulting does not comprise a core activity of the Group and the business did
not unlock the expected value for the rest of the Group. The results of the
discontinued business are disclosed separately.
IAS 16: Property, Plant and Equipment (PPE)
As at 1 July 2005 the Group elected to change its accounting policy for
measuring land and buildings from the cost basis to fair value. The new policy
will provide more relevant and reliable information about the carrying amount of
these assets. The estimated useful lives and residual values of all other
significant fixed assets were revised and the adjustments affected to previous
year earnings are summarised in the IFRS reconciliation contained in the
financial review.
Other disclosure adjustments affected in this interim report
* Early settlement discounts paid to customers have been set off against
turnover. The impact is summarised in the IFRS reconciliation contained in the
financial review.
* The carrying value of software (R5,9 million at 1 July 2005), previously
disclosed as PPE, has been reclassified as an intangible asset, and is amortised
over its useful life.
* Certain investments have been reclassified as financial assets at fair value
through profit and loss. These investments were previously disclosed as non-
current assets and are now separately disclosed as current assets.
* The impairment of a deferred tax asset of R83,1 million has been included in
the income tax expense in the reporting periods ended 31 December 2004 and 30
June 2005. This amount was included in operating expenses in the previously
reported results for the six months ended 31 December 2004.
2. Operating profit
IFRS IFRS IFRS
adjusted adjusted
31 Dec 31 Dec 30 June
2005 2004 2005
The following material
items have been charged
to the operating
profit.
Loss/(profit) on sale 156 (875) (4 891)
of businesses and
properties
Impairment of assets - - 3 340
and investments
Amortisation of client 4 974 - 1 568
contracts
Impairment of goodwill - 20 184 32 742
Exchange rate 12 488 (12 941) (20 624)
losses/(gains) on
translation
17 618 6 368 12 135
3. Net interest received/(finance cost)
Interest received 6 005 8 225 16 805
Reversal of excess - 17 698 17 698
provision
Fair value adjustment 382 1 115 (2 090)
Finance cost (4 993) (21 440) (36 716)
1 394 5 598 (4 303)
Segmental Analysis by Business Segment
IFRS IFRS IFRS
adjusted adjusted
31 Dec 31 Dec 30 June
2005 2004 2005
(6 months) (6 months) (12 months)
R"000 R"000 R"000
Revenue
Enterprise Applications 328 502 277 420 569 529
Solutions
Managed Services 550 997 458 855 999 254
879 499 736 275 1 568 783
Operating profit
Enterprise Applications 34 935 23 928 42 976
Solutions
Managed Services 91 495 78 516 188 405
Corporate and other (84 494) (75 747) (177 512)
41 936 26 697 53 869
Material items per (17 618) (6 368) (12 135)
note 2
Operating profit 24 318 20 329 41 734
Balance Sheet
as at 31 December 2005
IFRS IFRS IFRS
adjusted adjusted
31 Dec 31 Dec 30 June
2005 2004 2005
R"000 R"000 R"000
ASSETS
Non-current assets 345 475 223 786 338 883
Property, plant and 61 289 66 442 54 731
equipment
Goodwill 100 971 16 219 100 045
Intangible assets 5 653 10 261 11 747
Derivative financial 9 434 8 007 9 051
instrument
Investment in an 1 171 1 160 1 207
associate
Deferred tax asset 166 957 121 697 162 102
Current assets 507 548 388 001 556 755
Inventories 47 594 29 769 49 210
Trade debtors and other 326 826 251 824 393 645
receivables
Financial assets at 1 938 2 947 2 889
fair value through
profit and loss
Current tax asset 6 229 - 12 949
Cash and cash 124 961 103 461 98 062
equivalents
Total assets 853 023 611 787 895 638
EQUITY AND LIABILITIES
Total equity 300 319 (52 552) 272 373
Equity attributable to 266 580 (66 606) 246 774
equity holders of
GijimaAst
Minority interest 33 739 14 054 25 599
Loans to be converted - 116 750 -
to equity
Non-current liabilities 132 774 142 558 125 207
Interest-bearing 51 219 94 486 70 347
borrowings
Operating lease 21 029 18 319 19 801
liability
Deferred tax liability 60 526 29 753 35 059
Current liabilities 419 930 405 031 498 058
Trade creditors and 171 462 150 804 218 502
accruals
Provisions 59 038 55 007 80 634
Income received in 51 552 52 405 41 113
advance
Short-term portion of 40 591 45 888 36 161
interest-bearing
borrowings
Sundry payables 52 602 62 617 62 346
(including payroll
vendors and VAT)
Bank overdrafts 44 131 35 644 41 221
Current tax liability 554 2 666 18 081
Total equity and 853 023 611 787 895 638
liabilities
Cash Flow Statement
for the six months ended 31 December 2005
IFRS IFRS IFRS
adjusted adjusted
31 Dec 31 Dec 30 June
2005 2004 2005
(6 months) (6 months) (12 months)
R"000 R"000 R"000
Cash flows from
operating activities
Cash generated from 25 111 24 312 108 116
operations before
working capital changes
Working capital changes 29 719 13 689 (49 881)
Net finance cost 1 394 (12 604) (24 608)
Normal tax paid 2 404 (11 082) (30 988)
Cash generated from 58 628 14 315 2 639
operating activities
Cash flows from
investment activities
Vendor payments for - (150) (380)
past acquisitions
Cash obtained from - - 2 823
acquisition
Acquisition expenses - - (3 425)
Fixed assets acquired, (19 941) (8 700) 4 676
net of disposals
Cash (used (19 941) (8 850) 3 694
in)/generated from
investment activities
Cash flows from
financing activities
Proceeds from rights - - 160 000
issue
Share issue expenses - (1 650) (3 731)
Net proceeds (14 698) 708 (144 055)
from/(repayment of)
long-term borrowings
Cash (utilised in)/from (14 698) (942) 12 214
financing activities
Net increase in cash 23 989 4 523 18 547
and cash equivalents
Cash and cash 56 841 38 294 38 294
equivalents at the
beginning of the period
Overdraft to be - 25 000 -
converted into equity
Cash and cash 80 830 67 817 56 841
equivalents at the end
of the period
Statement of Changes in Equity
Share Share Vendor Distri-
butable
R"000 capital premium claims reserves
Balance at 1 July 184 343 457 8 207 (272 373)
2004 (IFRS
adjusted)
New shares issued 15 8 623
Share issue (1 375)
expenses
Prior year (11 772)
adjustment -
operating lease
Prior year 5 424
adjustment -
recognition of
previously
unrecognised
derivative
financial
instrument
Changes in amounts (8 207)
due to vendors
Loss attributable (80 214)
to shareholders
Dividends of
subsidiaries
Transfer to non- (27 840)
distributable
reserves
Currency
translation
differences
Balance at 31 199 350 705 - (386 775)
December 2004
(IFRS adjusted)
New shares issued 765 267 300
Discount on 30 876
acquisition (IFRS
3)
Share issue (2 356)
expenses
Profit 15 387
attributable to
shareholders
Currency
translation
differences
Balance at 30 June 964 646 525 - (371 388)
2005 (IFRS
adjusted)
Profit 8 598
attributable to
shareholders
Share-based 28
payments
Currency
translation
differences
Revaluation of
land and buildings
Balance at 31 964 646 525 - (362 762)
December 2005
Statement of Changes in Equity
Non- Minority Total
distribu
table
R"000 reserves Total interest equity
Balance at 1 July (46 617) 32 858 14 579 47 437
2004 (IFRS
adjusted)
New shares issued 8 638 8 638
Share issue (1 375) (1 375)
expenses
Prior year (11 772) (11 772)
adjustment -
operating lease
Prior year 5 424 5 424
adjustment -
recognition of
previously
unrecognised
derivative
financial
instrument
Changes in amounts (8 207) (8 207)
due to vendors
Loss attributable (80 214) 3 975 (76 239)
to shareholders
Dividends of - (4 500) (4 500)
subsidiaries
Transfer to non- 27 840 - -
distributable
reserves
Currency (11 958) (11 958) (11 958)
translation
differences
Balance at 31 (30 735) (66 606) 14 054 (52 552)
December 2004
(IFRS adjusted)
New shares issued 268 065 268 065
Discount on 30 876 30 876
acquisition (IFRS
3)
Share issue (2 356) (2 356)
expenses
Profit 15 387 11 545 26 932
attributable to
shareholders
Currency 1 408 1 408 1 408
translation
differences
Balance at 30 June (29 327) 246 774 25 599 272 373
2005 (IFRS
adjusted)
Profit 8 598 8 140 16 738
attributable to
shareholders
Share-based 28 28
payments
Currency 9 751 9 751 9 751
translation
differences
Revaluation of 1 429 1 429 1 429
land and buildings
Balance at 31 (18 147) 266 580 33 739 300 319
December 2005
Chief Executive Officer"s report
INTRODUCTION
* The integration of Gijima Info Technologies Afrika (Proprietary) Limited and
AST Group Limited was completed by early September 2005 and these results
represent only three months of operations as an integrated company. The merged
business has been awarded an Empowerdex AA rating which is the highest that has
been achieved by a listed ICT company.
* While we have made significant progress in meeting our strategic imperatives,
we have yet to receive the benefit of revenue growth from the merger. Our
pipeline of prospective business has however increased significantly.
* Continuous optimisation of the cost base remains a high priority. The cost
savings instituted during the past two years were maintained.
* Headline earnings do not yet reflect the benefit of the merger and were lower
than the comparative period, largely as a result of foreign currency translation
differences and the amortisation of contracts due to the merger.
* Guma Investment Holdings (Proprietary) Limited, (formerly Gijima Info
Technologies Afrika (Proprietary) Limited), has exercised its option to acquire
Kumba Resources Limited"s shareholding of 4,4% in GijimaAst, bringing its
shareholding to 36,6% of the Company. There are no funding structures associated
with this transaction.
MARKET CONDITIONS
Although there is strong evidence of technology refresh among large companies,
the focus is currently on hardware and conditions remain competitive in the
services arena. Our clients" requirements are evolving towards value-based
business models and there is a drive towards improved business processes to
maintain their own differentiation. Technology is seen as the enabler rather
than the driver and infrastructure is increasingly being viewed as an integrated
platform. This is putting pressure on service providers to offer integrated
technology capability. Clients are moving towards business metrics for measuring
the effectiveness of delivery, rather than plain service level agreements.
OPERATIONAL UPDATE
An important component of the integration was merging all infrastructure
activities into the newly formed Managed Services division to meet clients"
convergent requirements. Managed Services maintained a high service-delivery
record during the period. Distributed Technology Services (Proprietary) Limited
("DTS"), which remains ring-fenced due to its shareholding, continued to perform
well. Its prospects were cemented with the award of a substantial break-fix deal
by First National Bank ("FNB"). Recent investments in self-service solutions for
the financial services industry and the virtual private network (VPN) started to
produce positive results. These are important components of our integrated
offering. A software division was established to centralise our offerings and
supplier agreements. This focus tangibly deepens the competitive edge of the
division. The recent Gold Certification from Cisco Systems was another important
milestone in our accreditation programme. Managed Services is well prepared for
evolution of the market. With its historic investments and broad capability it
is positioned to add value to clients" business processes.
The restructuring of Enterprise Application Solutions (EAS), previously the
Solutions Division, was completed last year and was associated with a solid
recovery in the first six months of the 2006 financial year. Investments in new
technology offerings are starting to deliver revenue streams. ERP Solutions was
accredited by SAP Africa as a SAP Small and Medium Business (SMB) solution
provider for the mining and utility industries which bodes well in the current
resources boom. Our mining focus, GMSI recorded its best ever monthly pre-tax
profit in November 2005 and is currently rewriting existing applications in
Microsoft.net for better integration with other applications. Opportunities are
growing for its software in Canada and Australia as international demand can be
satisfied using South African resources resulting in higher margins despite the
stronger rand. The rand strength continues to impact the manufacturing sector
which is driven by lower total cost of ownership (TCO).
During the six months we made further inroads into the financial services sector
and now enjoy well diversified revenue streams across all the major financial
services groups. Our retail offering has been well accepted. The combination of
hardware and software through our agreements with AFS, BlueCube and Wincor
Nixdorf is a real differentiator.
We are seeing very positive and constructive acceptance of our new credentials
in the public sector. GijimaAst has shown a marked improvement in the level of
contact in all tiers of government and good deal flow has resulted at municipal
level. While government spend is significantly less than we had hoped for, we
believe that SITA"s new management, structures and processes will be a positive
factor in the private sector unlocking value for government through improved
working opportunities.
Improved bid qualification and bid management processes are well entrenched and
this has resulted in our qualified pipeline increasing significantly from August
to December 2005. Pressure on existing contracts and the revenue decline has
been successfully bridged by leveraging our strong industry focus around
strategic blue chip companies.
FINANCIAL REVIEW
The reported results for the six months ended 31 December 2005 include the
results of the businesses acquired from Gijima. The table below shows results on
a comparable basis at revenue and EBITDA level, including the results of the
Gijima businesses with those of AST for the six months ended 31 December 2004.
31 Dec 31 Dec Variance
2005 2004
Reported Combined AST Gijima* %
R"000 R"000 R"000 R"000
Revenue 879 499 884 441 736 275 148 166 (1)
Gross reported 895 221 747 055 148 166
in 2004
Discontinued (9 933) (9 933) -
operation
Settlement (847) (847)
discounts paid
EBITDA 46 681 76 002 60 466 15 536 (39)
Non-comparable 13 788 (12 988) (12 988)
items eliminated
Foreign currency 12 488 (12 941) (12 941)
translation
differences
IFRS adjustments - (1 235) (1 235)
(excluding
depreciation)
Integration 1 300 -
costs
Discontinued - 1 188 1 188
operation
Comparable 60 469 63 014 47 478 15 536 (4)
EBITDA margin - 6,9 7,1 6,4 10,5
comparable (%)
EBITDA margin - 5,3 8,6 8,2 10,5
reported (%)
* Extracted from circular to shareholders in April 2005, adjusted for additions
to central costs post-integration.
REVENUE
The Group successfully contained the downward trend in revenue experienced
during the past two years. Revenue for the six months was 1% down on a
comparable basis.
Note: The reduction in revenue in 2003 and 2004 was calculated after eliminating
the impact of non-core businesses sold. The revenue of Gijima businesses
acquired was added to the 2004 revenue figure for purposes of calculating the
reduction in revenue in 2005.
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION ("EBITDA")
The reported EBITDA margin reduced from 8,6% to 5,3%. The most significant
contributor to the reduction in margin is a foreign currency translation loss of
R12,5 million (pre-tax) following the strong performance of the rand against
other major currencies during the period under review. This loss had no impact
on the Group"s cash flows or operations and contributed 2,9% to the variance in
the EBITDA margin on a comparable basis. Other contributors to the reduction in
EBITDA margin were:
* the impact of the straight-lining of operating lease payments which was
implemented in June 2005 (R1,2 million);
* the cost of integration of the Gijima and AST businesses during the first
quarter of the current financial year (R1,3 million).
The EBITDA margin, after elimination of these items, was 6,9% which is more in
line with the comparable margin in December 2004 of 7,1%.
INTANGIBLE ASSETS AND GOODWILL
Amortisation of R4,9 million of the value placed on contractually secured
agreements at the date of the merger with the Gijima businesses is included in
headline earnings. The remaining balance of R0,8 million will be fully amortised
by 30 June 2006.
The values of the goodwill and trade name assets flowing from the merger with
the Gijima businesses are unchanged from the previous reporting period. The
finalisation of these values and classification of the useful life of the trade
name will be finalised by 3 May 2006, as permitted by IFRS 3.
FINANCE COSTS
Interest paid reduced from R21,4 million to R5,0 million following the
significant reduction of R156,8 million in interest-bearing debt from December
2004 to December 2005. Interest received reduced from R8,2 million to R6,0
million.
EARNINGS AND HEADLINE EARNINGS PER SHARE
The Group reported an attributable profit for the six months to 31 December 2005
and the achievement of basic earnings of 1,05 cents per share from continuing
operations represents a marked improvement from the loss of 40,75 cents (IFRS
adjusted) reported in 2004. The discontinued operation contributed a loss of
0,16 cents (Dec 04: 0,61 cents) to the Group"s basic earning per share.
Headline earnings per share reduced from 6,58 cents (fully diluted and IFRS
adjusted) in 2004 to 1,07 cents. Major contributors to this reduction are:
* the increase in issued share capital of 766 million shares (the 2004
calculation showed the dilutive impact of the rights issue in 2005 on a weighted
average basis only - the full impact of the rights issue impacted HEPS by 2,11
cents);
* the foreign currency translation loss (0,92 cents after tax);
* the amortisation of client contracts from the Gijima merger (0,37 cents);
* other contributors of R2,5 million discussed under EBITDA above (0,18 cents).
BALANCE SHEET
Critical balance sheet ratios showed further improvement from 30 June 2005:
* The debt-equity ratio improved from 0,6 times at 30 June 2005 to 0,5 times
with a reduction of R11,8 million in interest-bearing debt during the six months
under review;
* Net interest-bearing debt, after set-off of accessible cash balances, reduced
by R25,3 million from 30 June 2005 to R44 million at 31 December 2005;
* The Group"s current ratio improved from 1,1 at 30 June 2005 to 1,2 at 31
December 2005.
Net cash on hand increased from R56,8 million at 30 June 2005 to R80,8 million
at 31 December 2005. The Group generated R58,6 million cash from operating
activities compared to R14,3 million for the comparative period. Included in
cash and cash equivalents are cash balances of R111,3 million from AST
Distributed Technology Services (Pty) Limited (70% owned by GijimaAst). The
utilisation of this cash is regulated by a shareholders agreement.
CAPITAL EXPENDITURE AND CAPITAL COMMITMENTS
The Group incurred capital expenditure of R20,4 million during the period under
review. R13,1 million of this expenditure relates to the procurement of
predominantly income generating computer equipment and R7,3 million to back-up
equipment acquired in order to maintain contractual service delivery levels to
customers. Commitments at 31 December 2005 to incur future capital expenditure
amounted to R2,0 million.
CONTINGENT LIABILITIES
At 31 December 2005 the Group had contingent liabilities in respect of
registered performance bonds and other guarantees to the value of R1,3 million
(June 2005: R2,5 million).
IFRS
The impact of adopting IFRS on revenue and the loss for the reporting periods
ended 31 December 2004 and 30 June 2005, as well as on equity at these dates, is
illustrated in the reconciliations presented below.
12 months 6 months
ended 30 ended 31
June Dec
2005 2004
R"000 R"000
Revenue
Previously reported 1 587 302 747 055
Less settlement discounts granted (1 724) (847)
Revenue of discontinued operation (16 795) (9 933)
IFRS adjusted revenue 1 568 783 736 275
Loss attributable to equity holders of
GijimaAst
Previously reported (64 834) (80 475)
Depreciation (post-tax) 7 1 234
Straight-lining of lease payments - (1 235)
(post-tax)(already adjusted in June
2005 results)
Derivative financial instrument (post- - 262
tax)(already adjusted in June 2005
results)
IFRS adjusted loss for the period (64 827) (80 214)
30 June 31 Dec 1 Jul
2005 2004 2004
R"000 R"000 R"000
Total equity
Previously reported 243 258 (64 029) 34 785
Minority interest 25 599 14 054 14 579
Depreciation (post-tax) 3 516 4 744 3 510
Straight-lining of lease - (13 007) (8 803)
payments(already adjusted in
June 2005 results)
Derivative financial - 5 686 3 366
instrument(already adjusted in
June 2005 results)
IFRS adjusted total equity 272 373 (52 552) 47 437
STRATEGY AND PROSPECTS
Our clients" changing needs are reflected in our strategic positioning. Our
business development initiatives are increasingly leading sales which add value
directly into our clients" business processes. With our extensive capability,
experience and partnerships our proposition reflects this evolution towards
value-based business models. We believe that continuous service improvements and
assessment of our offering are key to meeting our objective of client
centricity.
In the recent past we have made new investments in specific industry segments
which strengthen our ability to add value to clients in these sectors. We have
also focused on partnering with leading technology vendors across all
activities. Our medium term focus is to conclude the opportunities which we have
identified. In the solutions environment we are seeing increased demand for
Microsoft and ERP solutions. We are also seeing evidence that the banking sector
is moving into an asset refresh cycle and with our bundled offering, GijimaAst
is a strong contender. Our empowerment credentials will enable us to compete
meaningfully for the significant government opportunities which exist. We
believe that, inter alia, the Accelerated and Shared Growth Initiative of South
Africa (ASGISA), the 2010 Soccer World Cup, the digitisation of broadcasting and
the deregulation of the telecommunications sector will provide the catalyst for
ICT opportunities. GijimaAst has concluded an agreement with ZTE Corporation of
China, a pre-eminent provider of telecommunications equipment to focus on the
telecommunications market. The resources boom bodes well for international
mining projects where opportunities abound. We are well positioned to take
advantage of the opportunities that may arise.
ACKNOWLEDGEMENTS
The strategic progress which we have made during the past six months would not
have been possible without the ongoing commitment of our employees,
shareholders, board of directors, suppliers and bankers. We have focused on
delivering value to our clients and thank them for the trust that they continue
to impart on these partnerships.
The benefits of the hard work are starting to materialise and I remain dependent
on and grateful for your continued support.
For and on behalf of the board
John Miller
CEO
GijimaAst
28 February 2006
Directors:
HJ Smith* (Chairman), RW Gumede (Deputy Chairman), JE Miller (Chief Executive
Officer), NJ Dlamini*, W Drue*, MG Erasmus, CJH Ferreira (Financial Director), M
Macdonald*, NI Mhlongo*, CME Mostert*, K Mpinga* (Democratic Republic of the
Congo), AFB Mthembu*, CJ Potgieter*, CP Potgieter, JCL van der Walt*, * Non-
executive
Company secretary:
J Rademan
Registered office:
47 Landmarks Avenue
Kosmosdal, Samrand, South Africa
(012) 675 5000
Transfer secretaries:
Ultra Registrars (Pty) Limited
(Registration Number 2000/007239/07)
Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
This and additional information is available on our website: www.gijima.com
Date: 28/02/2006 07:00:17 AM Produced by the JSE SENS Department
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