At a loss

In a comparatively quiet week, the acquisitions by Alcatel of Genesys Telecomms Labs and by CMGI of Flycast Comms dominated the international IT world last week. At home, the flood of local results including many losses, and the speculation fuelled by the USKO/Altron partnership announcement stole most of the limelight.

• full-year losses by the Connection Group, despite the recent sale of its UK training operation and Business Connection (will it survive?), Oxbridge Online (loss smaller than in the prospectus) and Cape Star Investments (includes SourceCom Technology);
• a year-end loss by Whetstone (not predicted in the prospectus);
• satisfactory full-year figures from Paradigm Interactive Media (INTeLLa recently sold, so the next results will reflect the different make-up of the company) and Pinnacle Technology (very close to, but slightly better than forecast);
• disappointing year-end figures from MMW Technology Holdings (revenue well up but income down) and ValueCom Holdings (income boosted by sale of subsidiary);
• excellent maiden interim figures from OAI;
• good interim results from Altech (revenue slightly down on last year but income well up);
• disappointing interim numbers from Explorer, including a warning that the year-end numbers will not be met;
• satisfactory interim figures from Aries Investment Holdings, with particularly strong IT growth;
• interim losses from Cyberhost (well adrift from the prospectus) and Micrologix (nine-months figures and well adrift from forecast); and
• an interim loss warning from Infowave.

[Local]

Local acquisitions, mergers, investments etc (see attachment).

Local Cautionary Notices (see attachment).

Local Listing calendar (see attachment).

Other local news included:

• the announcement that the Botswana bourse will get its first IT listing in the form of RPC Data, a supplier of computer systems and software, as from 1 November;
• Y2Ktec shareholders have rejected the proposed take-over of DRG Consultants; and
• at long last, the formation of a strategic alliance between USKO and Altron, which also sees Bill Venter taking over as the non-executive chairman of USKO. Additionally, it looks as if EDS will buy-out Dimension Data`s share in EDS Africa.

• we heard that BellSouth is preparing a bid for Sprint, a little over a week since the news of MCI WorldCom`s interest was made public; and
• there is much speculation in the market following the announcement by Mannesmann that it intends to split into two separate companies.

[International]

International acquisitions, mergers, joint ventures etc (see attachment).

Other international news included:

• the announcement of a major restructuring at NEC; and
• the move by Telecom Italia to transfer its 60% controlling stake in TIM, its highly profitable mobile telephone subsidiary, to Tecnost, the shell company used by Olivetti as the vehicle for its successful take-over of the Italian privatised group.

We saw excellent figures from CMGI. Losses, however, came from CompUSA, Entex, Freeserve, IFX, Intraware, MSGI, Olicom, On-Line and USA Technologies.

At long last, [there was] the formation of a strategic alliance between USKO and Altron, which also sees Bill Venter taking over as the non-executive chairman of USKO.

Good numbers were recorded by CellStar, ICM Computer and Science Systems, with satisfactory figures from Micron Electronics (better than expected) and Perle Systems.

Mediocre returns came from Telspec.

Other financial news included profit warnings from Anicom, Apple, Cap Gemini SA, Ceridian, HP and NEC (yet another downward forecast); share split announcements from BroadVision and Sun; a very successful IPO by Foundry Networks (price quadrupled on debut); and the announcement that Alta Vista is likely to go public in January 2000.

Locally

Brainware (+29.3%)
CIH (-40%)
Explorer (+27.3%)
Jasco (-36.3%)
MB Technology (+49.4%)
MMW (+41.2%)
Pinnacle (-24%)
Skills Accel (-26.7%)
Streamworks (-23.1%)
Top Tech (+25.9%)
ValueCom (+108.3%)
WenTech (+28.6%)
Y2KTec (+20%)
Zaptronix (-20%)

Internationally

At Home (+23.7%)
Ceridian (-22.9%)
Epicor (+19%)
Frontline Comms (-22.4%)
MEMC Electronic Materials (-25.6%)
Network Solutions (+32.9%)
Pervasive Software (29.3%)
VerticalNet (+22.4)

Information Week has just published its annual ranking of the leading business users of technology, and it`s a classic "cobbler`s shoes" scenario. In the top 50 there are only a handful of IT/telecommunications companies; Microsoft (3), Sprint (5), Cabletron Systems (6), Cincinnati Bell (16), IBM (19), Lucent Technologies (23), Cisco Systems (32), MCI WorldCom (37) and HP (41). Notable absentees from the top 500 list are Compaq, GartnerGroup, Intel, Oracle and Sun Microsystems.

As I will be away in the US this week, the next issue of Booth`s Bites will appear on 18 October, but watch out for interesting developments involving the Dimension Data and Comparex offshore entities.