A six-week wrap-up

Welcome to the first issue of Booth`s Bites for 2003. I trust that this will be a good year. This issue is quite extensive since it covers a six-week period and the start of the quarterly results flood for the period ending 31 December.

The DynCorp acquisition by CSC that escalated the latter into the top five IT services companies list worldwide, Commerce One`s exit from the e-marketplaces market, Microsoft`s $1.1 billion settlement for various Californian claims; and the happenings at Cable & Wireless and Marconi dominated the international world of IT and telecommunications during the last six weeks.

I believe we will see an IT growth figure approaching 15% for this year locally.

Paul Booth, MD, Global Research Partners

At home, Telkom SA`s interim results and the discussions/debate re the second national telecoms operator and whether either bidder has satisfied the tender requirements, which seems not to be the case according to ICASA consultant Next Generation, stole the limited ICT headline space that has been available over the last few weeks.

* Good interim numbers from Telkom SA (revenue and earnings both up);

* Poor half-year figures from Netactive (revenue well down and profit only from sell-off);

* Interim losses by Acuity Group Holdings (revenue also down) and M-Web (but M-Web South Africa EBITDA break-even);

* Mustek listed its depository receipts on the Taiwanese Securities Exchange;

* Crux Technologies` shares were suspended and de-listed;

* ShawCell`s shares were suspended;

* Streamworks` shares will de-list from tomorrow (shares already under suspension) and the company will subsequently be voluntarily winding-up;

* Profit warnings from AST and Global Technology;

* Potential JSE share suspension notices for Aqua Online and EC-Hold, pending the submission of their annual financial statements by 31 January;

* The JSE`s annotation on MGX`s shares until the qualified audit opinion on the annual financial statements is resolved; and

* The satisfactory listing in mid-December of Beget Holdings in the JSE venture capital section.

[Local]

Other local news included:

* Prism Holdings` proposed rights offer to raise nearly R35 million;

* UCS will re-purchase shares;

* AST and Mustek will cut jobs;

* MGX secured a R100 million loan for its on-going working capital;

* Global Technology expects a year-end loss from Australian subsidiary GTA and intends to de-list it from the Australian Stock Exchange;

* Errol Wills was appointed as MD of Softline Lorge;

* The Department of Communications has invited applications for licences to operate telecoms services in 10 rural areas where Telkom doesn`t penetrate effectively; and

* MTN has been invited to take-over the mobile licence formerly held by TriTelecommunications in Tanzania.

* We saw the following name changes: Anaren Microwave to Anaren, Lexor International to Grayling Wireless, Storage Access Technologies to Bluepoint Data Storage, SynQuest to Viewlocity, and Virtual Academics to Cenuco;

* The termination of the proposed acquisition of Hughes Electronics by EchoStar Comms;

* Infineon Technologies is to sell its stake in its manufacturing joint venture with Taiwanese Mosel Vitelic;

* The Italian government will sell-off its remaining 3.5% shareholding in Telecom Italia;

* Cable & Wireless exited from the FTSE 100 and will sell-off 60% of its stake in Singapore`s MobileOne;

* Marconi finalised its agreement with banks and bondholders re the financing of the repayment of its massive debt ($4.4 billion);

* The Taiwanese government sold off of its 13.5% stake in Chunghwa Telecom to an eight-company consortium for $1.9 billion;

* Four German DP and IT services companies - DVG, dvs, nbg and SIK - merged to create a new company, FinanzIT GmbH, focusing on IT services employing 2 500 people and with a turnover in excess of $700 million;

* A federal judge ordered that Microsoft must distribute Sun`s Java programming language in its operating system within the next four months;

* Creditors accepted Hynix Semiconductor`s restructuring plan, which involves a $1.6 billion debt-for-equity swap;

* The privatisation of NetLojix Comms;

* Talks between T-Systems and Cap Gemini Ernst & Young re a possible partnership were terminated; and

* IBM continues outsourcing its manufacturing operations, this time to Sanmina-SCI for most of its Intel-based servers.

Additionally, look out for the orderly dissolution of Liquid Audio; Cable & Wireless` fate as it seeks to halt its share collapse; the buyer of Deutsche Telekom`s directory business; the buyer for Schlumberger`s volume software business; BEA Software`s possible take-over of Borland; the possible take-over of French services firm GFI; the potential management buyout of Irish-based software company, RiverDeep; Vodafone`s move to take full control of Sweden`s Europolitan, Netherland`s Libertel and Portugal`s Telecel, in which it already has management control; the finalisation of the Konica and Minolta merger; and the fate of Metromedia International, a company facing imminent collapse.

Furthermore, the Nasdaq-100 index annual reshuffling saw 12 technology companies being removed from the list but only two being added. The removals included Applied Micro Circuits, Atmel Comms, Conexant, Integrated Device Technologies, i2 Technologies, PMC-Sierra, Rational Software and Vitesse Semiconductor, while the additions were APC and Pixar.

[International]

Other international news included:

* The appointments of Joe Andrulis as president and CEO of TelOptica, Shellye Archambeau as CEO of Zaplet, Dan Artusi as president of Silicon Labs, Steven Bock as chairman and CEO of Unger Software, Mike Cannon as president and CEO of Solectron, David Colley as CEO of Media Logic, Ron Cooper as COO of Adelphia Comms, Stephen Ellis as chairman of Comtex, Ralph Faison as CEO of Andrew, Paul Flanagan as CEO of StorageNetworks, Brian Gray as CEO of Indigo Software, Edward James as interim CEO of Network-1 Security Solutions, Jack Johnson as CEO of Active IQ, Jeremiah Lambert as co-chairman of Global Crossing, Richard Lapthorne as chairman of Cable & Wireless, Peter Leoarulo as CEO of Novatel Wireless, Daniel Malcolm as CEO of Daou Systems, Alex Mandl as CEO of Gemplus, William Mitchell as CEO of Arrow Electronics, Richard Parsons as chairman of AOL Time Warner, Ronald Pickett as chairman and president of Telkonet, John Preett as chairman of PNC Telecom, Konrad Reiss as CEO of T-Systems, Mark Rossi as chairman of Novatel Wireless, Bob Russo as CEO of Nishan Systems, William Salter as MD of Paragon Software Systems, Arun Sarin as CEO of Vodafone (mid-2003), William Schleyer as CEO of Adelphia Comms, Dave Schwab as chairman of Micromuse, Stephen Schwartz as chairman of Asyst Technologies, Jeff Sturgeon as president and CEO of SARCOM, Geremy Thomas as deputy chairman of PNC Telecom, Paul Tufano as acting president and CEO of Maxtor, Michael Turner as president and CEO of KnowNow, Myron Ullman as co-chairman of Global Crossing, Gary Velasquez as president and COO of Vitria, Jim Voelker as president and CEO of InfoSpace and Patrick Welker as president and CEO of ACS Comms;

* The resignations of Daniel Ackerson as chairman and CEO of XO Comms, Peter Bell as co-founder and CEO of StorageNetworks, Greg Brown as chairman and CEO of Micromuse, Mike Cannon as president and CEO of Maxtor, Steve Case as chairman of AOL Time Warner, John Farrand as president and CEO of Panavision, Christian Hufnagl as CEO of T-Systems, Dale Kutnick as chief research officer of Meta Group (remains as chairman), Tim Probert as president and CEO of Input/Output, Peter Sinisgalli as COO of CheckFree, Lord Stevens of Ludgate as chairman of PNC Telecom, Michael Ward as president and COO of Digitas, Gary Winnick as chairman of Global Crossing, and Lucy Woods as head of WorldCom`s International division;

* The retirements of Sir Christopher Gent as CEO of Vodafone (mid-2003), Koichi Nishimura as CEO of Solectron, and Albert Sawyer as CEO of ACS Comms;

* The death of Edward Funk, founder and chairman of Superconductive Components;

* The 'firing` of Donald Fitzpatrick as COO of Liberate Technologies; and

* Job loss announcements from AOL, Art Technology Group, Artesyn, ASML, AT&T, BearingPoint (ex-KPMG Consulting), Bsquare, Cable & Wireless, Charter Comms, ClickSoftware, CNET, Cognos, CommScope, Critical Path, ePresence, EXE Technologies, FiberMark, Gemplus, Hutchison 3G, Intrusion, IRI, Liberate Technologies, Marconi, Maxtor, Misys, ON Semiconductor, Pace Micro, Pink Roccade NV, PMC-Sierra, Qwest Comms, SAP, Schlumberger, Siemens, Sprint, StorageNetworks, TranSwitch, Verizon Comms, Vignette, Xwave Solutions and Yahoo.

We saw excellent* figures from Analogic (back in the black), ComputerLand, Datatec Systems (back in the black), eBay, Sand Technology (back in the black), Sensytech and Take-Two Interactive Software (back in the black).

Good numbers* were recorded by Adobe, ATI Technologies, Cognos, Cree (back in the black), Fayrewood (back in the black), Global Payments, Infosys Technologies, Integrated Performance Systems, Linear Technology, Mercury Computer Systems, MobileOne, Nassda, NVE (back in the black), Planar, Qlogic, Red Hat (back in the black), SCT, Symantec, TMSSequoia (back in the black - just) and Yahoo (back in the black).

Satisfactory* figures were posted by Accenture, ADP, Amphenol, Concord Comms, Creative Computer Applications, Exar, Fairchild Semiconductor (back in the black), Gtech Holdings, Harris, Intel, Iomega, Microsoft, Molex, Northgate Information Solutions, PanAmSat, Printronix, Progress Software, Richardson Electronics, Seagate Technology, Source Interlink, Sri Lanka Telecom, TSYS,

Mediocre* returns came from Andrew, Barra, Black Box, Comtech Telecomms, CSI, Epic Data (but back in the black), GFI Informatique, IBM, Integral Systems, IPC, Jabil Circuit, Juniper Networks, Morse, Net2Phone (but back in the black), NetSolve, Opsware (but back in the black), Oracle, Orckit Comms, Palm (but back in the black), Plantronics, Plumtree Software (but back in the black), Rambus, SBS Technologies, Scientific-Atlanta, SI Technologies, Tektronix, Tibco Software (but back in the black), Verity (but back in the black), Visual Networks (but back in the black), Volt Information Sciences, Wallace (but back in the black) and Wipro.

Very poor results* came from Norstan, RF Monolithics (but back in the black), Spectrum Control (but back in the black) and Workflow Management.

Losses* were reported by 3Com, Accelr8, ADIC, Aehr Test Systems, AirGate PCS, AMD, Amnis Systems, Anacomp, Anite Group, Apple, ASML, C-COR, Caldera International (The SCO Group), Celeritek, Charter Comms, Ciena, CMGI, CoorsTek, Covista Comms, Cypress Semiconductor, Data Translation, Delphax Technologies, Digi International, DigitalThink, Entegris, Extreme Networks, FSI International, Fujitsu Siemens, Gilat Satellite Networks, Handspring, HEI, Honeywell, IDT, IEC Electronics, iMagicTV, IndigoVision, Infinite Graphics, Inktomi, Innovex, Interland, International Rectifier, Internet Commerce, InterVoice, Intraware, Intrinsyc Software, Korea Thrunet, Laser Technology, Lawson Software, Manugistics, Metromedia International, Micron Technology, Midway Games, MIPS Technologies, NaviSite, Netflix, NetScout Systems, Network Equipment Technologies, NMS Comms, Pace Micro, Photronics, PlanGraphics, Procom Technology, Prosoft Training, PTC, Raft International, Rational Software, Redback Networks, Remec, Research in Motion, Riverstone Networks, Robotic Vision Systems, Rogue Wave Software, Saba Software, SatCon, Silicon Image, SofTech, Solectron, Sonic Foundry, Sorrento Networks, Standard Microsystems, Sun Microsystems, Teradyne, THQ, TippingPoint Technologies, Transmeta, TranSwitch, Ultimate Electronics, USOL Holdings, Vega Group Plc, Versata Software, Versus Technologies, Virage Logic, Visual Data, Wegener, Workstream and XATA.

Other financial news included share buy-back announcements from Docucorp International, ePlus, Lawson Software and PTEK Holdings; and profit warnings from 3Com, Activision, ADP, Advent Software, AirGate PCS, Alcatel, APC, Apple, Arris, Art Technology Group, AT&T, ATI Technologies, Avaya, BATM Advanced Comms, Brooks-PRI Automation, Cadence Design Systems, California Micro Devices, CDW Computer Centers, Compuware, Cirrus Logic, CompuDyne, CoorsTek, Cypress Semiconductor, Digital Impact, EchoStar Comms, EDS, ePresence, Financial Objects, Gateway, GRIC Comms, Horizon Technology Group, JD Edwards, John H Harland, ICT Group, Intersil, ITG, Maxtor, Misys, NCR, Nokia, Novadigm, Parametric Technologies, Philips Electronics, Photon Dynamics, Pitney Bowes, Plexus, PMC-Sierra, Pomeroy Computer Resources, Powerwave, ScanSource, Schlumberger, Signal Technology, Silicon Storage Technology, Source Interlink, Sprint, Tibco, Vasco Data Security and Virage Logic.

There were also share split announcements from Agere (reverse), ARC International, Audible (reverse), Conolog (reverse), Evolve Software (reverse), EXE Technologies (reverse), Grayling Wireless (reverse), Microsoft, Pegasus Comms (reverse), Read-Rite (reverse), ScanSource (reverse), Storage Access Technologies (reverse), Thaon Comms (reverse) and UBICS (reverse).

There was an over-subscription for Saudi Telecom`s IPO shares; a disappointing IPO from Seagate; and an IPO filing from Computer Associates for its ACCPAC entity.

Additionally, PCCW is to instigate a share consolidation; CyNet and General Magic have filed for Chapter 11 bankruptcy; Applied Microsystems has announced its plans for its liquidation; NEON Comms, NTL and XO Comms have completed their restructuring and emerged from Chapter 11; shareholders of Optio Software have rejected a reverse stock split proposal; Rage shares have been suspended on the LSE and the company is the subject of a possible MBO; Ariba and Veritas Software are to re-state some of their financial numbers for 2000 and 2001; and Xerox is to re-state, yet again, its 2001 and 2002 financial results.

Locally

AST (+40%)
CCI Holdings (-50%)
Cycad (+33.3%)
Elexir (+66.7%)
Idion (-32.2%)
Intervid (+32.2%)
Pinnacle (+62.5%)
Sekunjalo (+57.1%)
Stella Vista (-28.6%)
Vesta (-33.3%)

Internationally

Arris (+87.8%)
Blue Coat Systems (+53.5%)
Elcom International (-65.8%)
Focal Comms (-82.4%)
NCD (-53.1%)
On2 Technologies (+66.7%)
Previo (-92.7%)
Read-Rite (-52.4%)
SVI (+94.2%)
Vixel (+57.5%)
Workflow Management (+66.1%)

Despite the conservative growth figures emanating from Europe and the US, I believe we will see an IT growth figure approaching 15% for this year locally, thus reversing the small growth numbers we have experienced over the past couple of years.

* NB

Guidelines for the categorisation of results are as follows. The figures are always in comparison with the equivalent period for the previous year; pro forma numbers are ignored (the terminology may vary slightly from country to country).

* Excellent: Both revenue and net income growth are in excess of 50%.

* Good: Both revenue and net income growth are in excess of 10%.

* Satisfactory: Revenue is within 10% of previous year and net income is up.

* Mediocre: Either revenue and/or net income is down.

* Very poor: Net income is less than 1% of revenue.

* Loss: A loss has been recorded.