It's been a long time coming. GijimaAst is this year's most empowered JSE-listed company in the information & communication technology (ICT) sector. Overall, this group lies fifth in the Top Empowerment Companies (TEC) survey, up from last year's 13th.
To prove its empowerment mettle, Gijima was awarded an AA rating for complying with all the pillars of the broad-based black economic empowerment (BEE) scorecard late last year. And, in this year's TEC this ICT company gets 80,92%. In school terms, that would be a distinction, albeit just.
That this IT firm has earned high marks in many areas - such as ownership, affirmative procurement, skills development and management - illustrates its commitment to broad-based BEE. This holistic approach should serve as food for thought to the captains of SA business who tend to focus on ownership, to the detriment of other equally important elements.
But, empowerment is not the only game where Gijima excels. Now under the leadership of industry old hands chairman Robert Gumede and CEO Jonas Bogoshi, the firm has turned the corner from a perennial history of red-inked financial statements to what it is today: firmly in the black.
Last year, the group delivered a bumper set of results. Operating profit swelled 81% to R171m on the back of a 25% surge in revenues to R2,5bn. But an unexpected surge its in debtors' book, which neared R200m, was disappointing. A book of this size implies that Bogoshi and his team spend a lot of resources (unsuccessfully, perhaps) chasing the many clients who don't pay.
Gijima's other bugbear is its less-than-impressive PR image, stemming from alleged financial impropriety and unconventional business practices. Bogoshi and Gumede should get busy working on fixing this blemish.
On the flip side, the company's knack of pipping rivals in winning large contracts has set it on a solid trajectory in a market that, according to Bogoshi, "remains buoyant despite the generally subdued domestic economy". However, a look at Gijima stocks' run on the bourse suggests that investors hold a different view.
Even with a low p:e of four, the stock isn't getting a "buy" recommendation from the I-Net Bridge analysts' consensus. Plus, Gijima's market cap on the JSE has lost more than two-thirds of its value to less than R400m this year (from R1,2bn in 2008), whereas the all share index has fallen by 333% in this period.
As a 37% shareholder, chairman and founder Gumede must be grinding his teeth as his portfolio takes a pounding. But, for bargain hunters with a long-term view, the low p:e provides an opportunity to jump in.
On the broad-based BEE front, Gijima says its transformation agenda includes the support and development of small- and medium-sized enterprises. Last year, the listed firm increased its regional network for SMMEs. For this and its other initiatives, it tops the sectoral charts by claiming all 15 points in enterprise development. Though four other companies in the sector claim the 15 enterprise development points, Gijima is set apart by its high enterprise development spend.
But, when it comes to economic interest by black women, it is Paracon that earns itself bragging rights for achieving a high 19% in the IT sector. It's also worth pointing out that three of nine Paracon directors are women. Unfortunately, there's a scarcity of companies with women participation as a key part of their transformation plans.
Paracon, a hi-tech recruiting firm which topped last year's ICT standings, garnered 68,84% which is markedly lower than Gijima's 80,92%. However, because of rather stiff competition, the Mark Jurgens-led Paracon moves down three places in sectoral rankings. In the TEC overall rankings, it reversed nine notches and missed an enviable spot in the Top 20.
Joining Gijima and Paracon in this year's top league are high-flying ICT firms AdaptIT (formerly known as InfoWave) in 7th place and one of the oldest black ICT groups, Faritec.
Conspicuous by their absence at the top of the rankings are large telecommunications firms Telkom and MTN, which have fallen remarkably from last year's rankings.
Another spectacular loser, Gary Morolo's Datacentrix, fell from last year's 19th spot to 133 after scraping a mere 10,36%. Lastly, Brett Dawson's Dimension Data (placed 17th overall last year with a fine 67,21%) falls outside the Top 200.
