Last week: DiData loss, Prism empowerment deal

SCO Group continued its Unix intellectual property (IP) claim campaign and the first full-year figures from the new HP/Compaq entity dominated the international world of IT and telecommunications last week.

The news that CSC intends to make two acquisitions in Europe in the next two or three months continues the consolidation trend we have been seeing over the past few months in the computer services market.

Paul Booth, MD, Global Research Partners

At home, the huge loss incurred by Dimension Data and the Prism empowerment deal stole much of the local ICT headline space.

* we saw satisfactory year-end numbers from Paracon (revenue down but attributable profit more than double) and Spescom (revenue down a bit but back in the black);

* a full-year loss from Dimension Data (revenue also marginally down);

* mediocre half-year numbers from CCN (revenue up but earnings well down); and

* an interim loss from Labat Africa (revenue also well down).

Other local news included:

* an empowerment deal will see 25.1% of Prism subsidiary PTSS being sold to Gijima Technologies;

* the opening of a Gauteng office by Cape Town-based I-Soft Solutions;

* the appointments of Ralph Collis as executive chairman of Infowave, Rodney de Koch as CEO of ICOZA and Tiffany Dunsdon as CEO of Infowave;

* the resignation of David Meintjes as CEO of UUNet South Africa; and

* Alcatel announced that it would sell a 30% stake in its South African operations to a local group led by black investors.

New local distributorships included that of Annex Distribution for a range of products from Prolink Microsystems.

* the name change of Genient, the enterprise software vendor, to Corizon;

* the financing deal involving General Atlantic Partners and Cheung Kong Group that will ensure the immediate survival of Critical Path; and

* the French government had agreed to forgive Groupe Bull 90% of its EUR490 million loan.

Additionally, look out for Qwest Comms International`s possible purchase of Allegiance Telecom out of bankruptcy and for possible European acquisitions by CSC.

Other international news included:

* the appointments of Patty Azzarello as president and CEO of Euclid, Michael Donnell as president and CEO of Zi, William Gibson as chairman of interWAVE, Carmine Napolitano as president of CATC and Robin Stracey as president and COO of Applied Imaging;

* the resignations of Kim Polese as chairman of Marimba and JCT van der Wielan as chairman of PinkRoccade NV; and

* job loss announcements from Adobe Systems, AT&T Wireless, IBM, NTL, Philips Electronics and Verizon Comms.

We saw excellent* figures from Ditech Comms (back in the black), Innovative Software Technologies, Marvell Technology Group (back in the black), OmniVision Technologies and VimpelCom.

Very good* numbers were posted by Daktronics, Innovative Solutions & Support and Tetra Tech.

Good figures* were recorded by Analog Devices, Autodesk (back in the black), Camtek (back in the black), Detica, eOn Comms (back in the black) and mmO2 (back in the black).

Satisfactory* figures were announced by American Software, Hector Comms, HP, Logility, Niku (back in the black), Novo Network Management (back in the black), Qwest Comms (back in the black), Swisscom, T-Systems, Technical Comms, TeleCity and Telekom Austria.

Mediocre* returns came from Brocade Comms, C&D Technologies, Catalyst Semiconductor, Datawatch, Maximus, MTS Systems, PhotoWorks, Serena Software and Vtech.

Very poor results* were posted by Agilent Technologies and Information Analysis,

Losses* came from ACT Teleconferencing, Aegis Comms Group, Agile Software, Ansoft, ASA International, ATX Comms, Blue Coat Systems, Cimatron, CML Microsystems, CNT, Cognigen Networks, Comdial, Commtouch, Dataram, DG Systems, eLinear, Epcos AG, Epic Data, Front Porch Digital, Frontline Comms, Gensym, GlobeTel Comms, IIJ, ImageWare Systems, Integrated Security Systems, Intuit, iSECUREtrac, Isomet, iTouch, Japan Telecom, Knology, Kulicke & Soffa, M-Wave, Matav, Microsemi, Mitek Systems, MOSAID Technologies, MTI Technology, NCT Group, Nematron, Norsat International, Novell, On Command, OSE USA, Phone1 Globalwide, Portal Software, Pro Tech Comms, Prologic Management Systems, Prosoft Training, Pumatech, Sense Holdings, SkyTerra Comms, Storage Engine, TeraForce Technology, TiVo, TTI Telecom, TVC Telecom, VA Software, Voxware, Wind River Systems, XATA and XKO Group.

Other financial news included analyst upgrades for Ciena, Cypress Semiconductor, DoubleClick, Nuance Comms, SafeNet, Sycamore Networks and Syntel; analyst downgrades for Jabil Circuit and Take Two; share offerings from Callidus Software, Equinix, Net2Phone and Zoo Digital; and share buy-back announcements from Black Box, Digitas, EFI, Fair Isaac, PCTEL and Vodafone.

There was also an employee stock option exchange programme from CSG Systems; as well as positive results/profit warnings from ATI Technologies and Wolfson Microelectronics; a negative results/profit warning (often veiled) from Insignia Systems; and a very good IPO from Callidus Software, the enterprise incentive management systems software company. Additionally, FiberCore filed for Chapter 11 protection.

Locally

AST (+15.4%)
Elexir (-33.3%)
Faritec (+12%)
Global Technology (-25%)
Labat Africa (-11.4%)
Maxtec (-25%)
Prism (-29.6%)
Spescom (-12.3%)
Vesta (+25%)
Zaptronix (-33.3%)

Internationally

Allegiance Telecom (+52.9%)
AXS-One (+29%)
Com21 (-100%)
Commerce One (-26.3%)
Eagle Broadband (-24.8%)
Leap Wireless International (+133.3%)
Mitek Systems (-28.9%)
SONICblue (-25%)
SRS Labs (+25%)
Trace Group (+27%)

In terms of indices, Nasdaq was down 1.9% and the JSE was down 3.4% for the week.

The news that CSC intends to make two acquisitions in Europe in the next two or three months, one in France and one in Germany, continues the consolidation trend we have been seeing over the past few months in the computer services market.

The names that immediately spring to mind are French-based Cap Gemini Ernst & Young, which recently acquired Transiciel; French-based Atos Origin, which has announced plans to buy most of Schlumberger`s computer technology interests (the old Sema group); T-Systems and Siemens Business Services; although all of these companies could now be too big for CSC to absorb easily.

Other target companies could include Gedas AG, Sopra SA, Steria Group SA and Unilog SA.

* NB

Guidelines for the categorisation of results are as follows and 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 is in excess of 50%.

* Very good: Both revenue and net income growth is in excess of 25%.

* Good: Both revenue and net income growth is 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.