Column scores three out of three

The $40 billion-plus takeover of Orange by France Telecom, the acquisition of Chromatis Networks by Lucent, and the takeover of Baan by Invensys (all of which were predicted in this column last week) dominated the international world of IT and telecommunications last week.

Baan`s Aurum CRM division doesn`t fit very well within the new set-up and could be a candidate for disposal.

Paul Booth, Columnist, ITWeb

The long agonising wait of the last few months is finally over, with Baan agreeing to be acquired by London-based electronics and engineering firm Invensys for a little over $700 million. It will form part of a newly-formed software and services division that will focus on global manufacturing solutions, but will be restructured and trimmed of about 1 000 staff members. Baan`s Aurum CRM division doesn`t fit very well within the new set-up and could be a candidate for disposal, as it is viewed favourably in the marketplace. In the last financial year Invensys had a turnover of about $15 billion, but recorded a loss.

At home, the flood of local results and the bombing of Microsoft`s Sunninghill offices made local headlines.

• we saw excellent full-year results from Idion (revenues from the first and second six month`s similar, but profit from second half of the year was double that of first half of year) and OAI (much better than prospectus forecast);
• good full-year results from Cape Empowerment Trust (although margins squeezed);
• mediocre full-year figures from Synergy (revenue on forecast but profit only 65% of prospectus forecast);
• poor full-year numbers from Casey (loss in second half of the year);
• a full-year loss from Auto Space Age Systems (mainly an exceptional item, although still a loss without it), Elexir (also no revenue growth over 50% of full year numbers) and Y2KTec (below expectations);
• more than satisfactory interims from ITI Technology Holdings;
• disastrous half-year numbers from Dectronic (a loss with negligible revenue); and
• a delay in the split of Educor into two separate listed entities.
• Additionally, IT fund Archway Venture Partners has made its 13^th investment by providing seed capital for supply chain company, Jumpoint.

[Local]

[Cautionary]

[Listing]

[Result]

Other local news included:

• the resignation of the founder, chairman and CEO of ITI, Gerrie Coetzee, and the subsequent appointment of Frank Arico, the MD of CRS, an ITI subsidiary, as the new CEO of ITI;
• another court room battle, this time involving Y2KTec;
• the announcement that Auto Space Age, following its acquisition of Insurance Outsourcing Managers and the unbundling of its business intelligence operations, intends to transfer to the financial services sector of the JSE; and
• the news that Aries Investment Holdings, following its disposal of its major packaging assets, is likely to focus more strongly on the IT sector.

• Madge Networks announced the formation of a subsidiary, Red-M, that will bring the power of mobile data, video communications and voice into the work environment;
• the announcement of a major restructuring of SAP`s development unit; and
• rumours that United Pan-Europe Comms is poised to take a major stake in Telewest, and that Vodafone AirTouch is likely to gain control over Spain`s second largest mobile telephone company, Airtel.

[International]

Other international news included:

• the appointments of Zach Bergreen as president and CEO of Astea International, Michael Carr as president and CEO of RDM, Peter Davis as president and COO of the Anvil Group and Arnold von Buren as CEO of Kofax Image products; and
• job cuts (8%) announced by NetObjects.

Financial results

We saw losses from DataMirror, FullNet Comms, International Datacasting, MCK Comms, MGI Software, NeoMagic, Net2Phone, NTS, Quintek, Satmex, SLMsoft.com, TigrSoft and Trintech.

Good numbers were recorded by Comverse Technology, Finisar, Manchester Equipment, Optio Software, REMEC (back in the black), Take-Two Interactive and Wind River Systems.

Satisfactory ones by BAE Systems Canada and Vodafone AirTouch.

Mediocre returns came from The IT Group; while very poor results came from Arel Comms & Software (but back in the black).

Other financial news included profit warnings from Getronics and Gresham Computing; an excellent IPO from optical networking company, ONI Systems; and a mediocre IPO from infrastructure company, CrossWorld Software.

Locally

ASAS (-40%)
Brainware (+50%)
Contlan (+66.7%)
I-Solution (+53.8%)
I-Tech (+33.3%)
Idion (+32.9%)
JemTech (+50%)
M-Web (+43.8%)
Micrologix (+33.3%)
PTH (-33.3%)
Spescom (+73%)

Internationally

Adaptive Broadband (+83%)
Baltimore Technologies (+61.5%)
Broadbase Software (+68.4%)
Digex (+59%)
Geoworks (+68.7%)
LanOptics (+82%)
MIPS (+75.7%)
Metricom (+58.2%)
Micromuse (+60.3%)
Open Text (+63.2%)
Staffware (+72.8%)
US Interactive (+58.9%)

The Microsoft final ruling has again been delayed until Wednesday this week, following input from Microsoft. Regardless of the proposed ruling, it will be opposed fiercely, and the appeal, if the ruling doesn`t go directly to The Supreme Court, will drag the issue out for several more months or even years.