JSE-listed Gijima remained confident of a return to profitability in 2014, despite widening its losses almost five-fold during the year ended June 30.

The information technology group posted a headline loss of 25.82c a share and a basic loss of 20.82c a share during the period under review, compared with the 5.28c a share each reported in 2012.

The loss for the period widened to R211-million in 2013, from a loss of R51-million in the prior year, interim CFO Liesl Tweedie said at Gijima’s presentation to shareholders, in Sandton, on Monday.

Revenue declined 17% from R2.2-billion in 2012, to R1.8-billion during the year under review – well below the company’s expectations – as the impact of the 2012 loss and in-sourcing of contracts emerged during 2013, further compounding the effect of a loss-making contract.

The group had instituted legal action against a contractor, which had cost the company R153-million of the R160-million lost on a multiyear project. The contractor allegedly “would never” be able to complete the project satisfactorily and Gijima had now taken full control of the undisclosed contract to arrest the losses.

“I don’t think the losses comes as a surprise to anyone,” said interim CEO Eileen Wilton, adding that, while it was a “tragic, big loss”, taking into account one-off costs, the company had started to show a turnaround.

Chairperson Robert Gumede assured wary shareholders that the company had identified the issues and was taking corrective action to bring Gijima back to “its glory days”.

Gijima, which planned to finalise the appointment of a permanent CEO and CFO before next Wednesday, had narrowed its second-half operating loss, excluding one-off items, to R10-million, compared with a R50-million operating loss for the first six months of the year.

Wilton pointed out that about R20-million in costs a month had also been cut from the company’s expenses.

Further, the group had also concluded an 83% subscribed rights offer, netting Gijima R135-million after expenses. Long-standing shareholders Guma, Allan Gray, Investec and Futuregrowth subscribed for R75-million, R35-million, R15-million and R6-million respectively.

The company also repaid the first tranche of R17-million plus interest of the A Class Debenture within the required timeframe, subsequent to year-end.

Gijima had also disposed of its mining and technology consulting business MineRP and was expected to conclude the unwinding of the complex international structure, which it inherited from the old AST, within the next three to six months.

The group, which had shed about 850 jobs – 350 of these through the disposal of MineRP and the conclusion of the Absa contract and 91 through a R16.4-million retrenchment process – would continue its focus on right-sizing the business to improve its financial position.

Another focus would be on retaining and growing Gijima’s existing client base.

"We have renewed all major long-term annuity contracts with key clients whose contracts became renewable during the period under review and all told, we are looking forward with confidence to the next 12 months,” Wilton added.

Gijima also continued work for the Department of Home Affairs, including the supply of, besides others, the infrastructure for the roll-out of South Africa’s new smart identity cards.