A two-week wrap-up

The merger of two of the largest disk producers, Maxtor and the HDD part of Quantum, the investment in Corel by Microsoft and the various ongoing telecommunications consolidations often involving mobile operators, dominated the international world of IT and telecommunications during the last two weeks.

While our telecoms authorities continue to significantly hamper our growth and development, our neighbouring countries are progressing ahead of us.

Paul Booth, MD, Global Research Partners

At home, major news included the VAT issues regarding Accord Technologies, the formal news re the "merger" of MGX Holdings and CCH (there is still much to be uncovered re this deal, since it is rumoured that there are still major issues to be resolved within CCH itself),and the news that Telkom may be able to remain a monopoly for an extra year and its desire for a long duopoly situation (what a frightening thought!).

• we saw good year-end numbers from Unihold (revenue only up a little but income significantly up);
• a full-year loss from C-Tech (revised figures for the period ending 31 December 1999, rather than 29 February 2000);
• good interim figures from Altech (margins well up) and Altron (mainly as a result of Altech`s figures);
• quite good interims from Datacentrix (revenue well up, but margins heavily squeezed);
• satisfactory interims from Explorer (but income down) and Power Technologies (but attributable earnings down);
• disappointing half-year numbers from Acuity (revenue and income both less than 50% of the last full-year figures);
• half-year losses from Jem Technology (revenue also down), SecureData (no current operations) and USKO (revenue also well down); and
• profit warnings from Accord Technologies (following VAT payment) and Jasco.

Additionally, Accord Technologies is in danger of being de-listed for failing to submit annual financial statements within the required time-scales; and Bynx shares are due to be terminated today.

[Local]

Other local news included:

• the appointments of Mark Harris as GM of IBM SA and Dave Lello as CEO of Siltek;
• the announcement that Softline is to merge the operations of Pastel Software and Brilliant Business Systems by the end of the year (this was expected);
• the name changes of Cabletron Systems (SA branch) to Enterasys Networks (in line with international changes) and USKO to Bytes Technology Group (this will also include a restructuring and some management changes that are intended to position it as Altron`s core IT focus within the group); and
• the resolution of the dispute between Paradigm and Cape Empowerment Trust.

• we saw the announcement of a joint venture between Siemens AG and Brokat AG for the development of a mobile payment transaction system;
• the folding of UK Internet and telecoms provider Powernet Telecom;
• the formation by NTL of a business communications division;
• confirmation that France Telecom and Equant were talking re a possible merger worth about $10 billion; and
• rumours that Vodafone may bid for Irish mobile company, Eircom, and that British Telecom may plan some form of a break-up in order to halt its share slide.

[International]

Other international news included:

• the appointments of Derek Burney as CEO and president of Corel, Thomas Casey as CEO of Global Crossing, Alice Hsin as president and CEO of Linx (an application service provider) and David Wright as president and CEO of Legato Systems;
• the resignations of Douglas Bergeron, CEO of Geac Computer, Robert Brace, financial director of British Telecom, Leo Hindery, CEO of Global Crossing, Jan-Ake Kark, CEO of Telia, and John Payne, chairman and CEO of Stamps.com; and
• job loss announcements from Anicom, Open Market and Unisys.

Financial results

We saw excellent figures from Actuate, Applied Micro Circuits, ARM Holdings, Cree, Inforte, Infosys Technologies, Juniper Networks (back in the black), KLA-Tencor, Lam Research, Microchip Technology, Micron Technology (back in the black), Rudolph Technologies, Silicon Storage Technology, Tollgrade and Yahoo.

Losses came from Advanced Technologies, AFP Imaging, ATI Technologies, Avistar Comms, Broadbase Software, C-bridge Internet Solutions, Cenosis, Centra Software, DoubleClick, Esker SA, EuroTelecom Comms, Groupe Focal SA, IMSI, Ingenuus, Interactive Intelligence, Intermost, Ixos Software, Micrografx, Net2Phone, Network Technology Plc., Numerical technologies, Omtool, Oryx Technology, Paradyne, Pivotal, PMC-Sierra, Printronix, Proginet, Redback Networks, Robocom, Sonus Networks, Systems Union Group, Veritas Software and Wanadoo.

Good numbers were recorded by ADP, Dallas Semiconductor, Entegris, Excel Technology, FileNET, First Data, FSI International, Gateway, InFocus, Motorola, Oce NV, Rational Software, Tessco and Vicor.

There were satisfactory results from AMD, Iomega (back in the black), MIPS Technologies, Seagate Technology and TSR.

Mediocre returns came from Cegid, HEI (but back in the black), Media General, PanAmSat, RSA Security, Three-Five Systems, Unisys, Video Display and VISX.

Very poor results came from Antenna Products (but back in the black) and Sierra Wireless.

Other financial news included profit warnings from 3dfx, Anicom, BMC Software, Complete Business solutions, Comtech Telecomms (EF Data Integration charges), Computer Associates, Compuware, Dell, Dot Hill Systems, Evolving Systems, Hyperion Solutions, iManage, Imation, Infonet Services, International FiberCom, Intershop Comms, Lucent Technologies, Marimba, Motorola, MyPoints.com, Neon Systems, Novadigm, Open Market, Pitney Bowes, Primus, PSDI, Razorfish, Saga Systems, Sagent Technology, Sapiens, SciQuest, SGI, Storage Technology, Structural Dynamics Research, Ultimate Software, Veeco Instruments and Xerox.

There was also a share split announcement from Applied Micro Circuits, and a good IPO from Synplicity (software).

Additionally, Freeinternet.com filed for Chapter 11 protection; Aspeon shares have been suspended on the Nasdaq,and B2 Bredband, the Swedish broadband company and Velocity, a healthcare-related-software organisation, have postponed their IPOs.

Also, Datalex, an Irish e-business infrastructure provider, RiverSoft, a software group, ITIS Holdings, a traffic information group, and ISP MobileFuture have announced they intend to list in Ireland/London.

Avaya, a break-off from Lucent Technologies, has now started trading independently. UK-based Raft International, a financial services software group, started trading on London`s AIM last week; and UK`s Marconi Corporation expects to list on Nasdaq this week.

Locally

C-Tech (+66.6%)
CIH (-50%)
Explorer (+50%)
Faritec (-42.9%)
I-Tech (-50%)
Infowave (+90%)
Jasco (-45.1%)
Smacsoft (+54.8%)
USKO (+42.9%)
Y2KTec (-42.9%)

Internationally

Applied Microsystems (-46.9%)
Bitstream (-43.2%)
Comdisco (-39.3%)
ConMat Technologies (-41.7%)
Geoworks (-40.7%)
Gilat Comms (-52.5%)
HNC Software (-82.5%)
Inktomi (-37.8%)
Lycos (-46.8%)
Manugistics (-49.8%)
Open Market (-51.3%)
Primus Telecomms Group (-47.4%)
Proxicom (-43.3%)
Saga Systems (-50.7%)
Sapiens (-49.9%)
Structural Dynamics Research (-38.6%)
SRS Labs (-43.9%)
Ultimate Software (-66.1%)

While our telecoms authorities continue to significantly hamper our growth and development, our neighbouring countries are progressing ahead of us. Mauritius Telecoms has been chosen by Lesotho to run its comms network, and will be part of the consortium, Mountain Kingdom Comms, which will own 70% of the company by the end of the year. The other partners are Eskom and Econet Holdings of Zimbabwe.