Lucky escape

It`s a relief to be back in SA, having been stranded in the US for several days immediately following the tragedy. Having been there at that time, I`ve some interesting stories to tell.

[VIDEO] As a direct result of the attacks, many of the plans highlighted in company`s external communications may well be delayed if not totally postponed. I will endeavour to cover these changes.

The cost of replacing just the PC equipment following the destruction of the World Trade Centre is estimated to be in excess of $250 million, while Verizon Comms has to spend a similar amount on replacing a switch centre. This is just a small portion of the total IT/telecoms replacement costs.

From next month, I will include those companies buying back their own shares, as this is becoming an extremely important activity, and is often used as a barometer of the financial state of these enterprises.

Major highlights

The cost of replacing just the PC equipment following the destruction of the World Trade Centre is estimated to be in excess of $250 million

Paul Booth, MD, Global Research Partners

The Compaq/HP merger to create the world`s largest IT company (if it ever happens), the take-over of control of J-Phone by Vodafone, the proposed merger of AOL Time Warner`s and AT&T`s cable TV operations, and the news that a break-up of Microsoft will not be persued by the US justice department, dominated the international world of IT and telecommunications during the last three weeks.

At home, the Ixchange debacle and the flood of local results stole much of the local headline space.

• we saw excellent year-end numbers from DigiCore (revenue up over 200%), very good year-end results from ERP.com (revenue and earnings both well up) and Global Technology (revenue and earnings both well up for the 12-month period, year-end moved to December);
• good year-end figures from Faritec (revenue and profit well up), Grintek (revenue up a little but profit well up), Kunene Technology and Mustek (revenue and net profit well up);
• satisfactory full-year numbers from CS Holdings (revenue up but earnings only just up) and Paragon (revenue and net profits up);
• a significant full-year loss from Ixchange (revenue well up but nearly R500 million loss);
• disappointing 12-month figures from Unihold, but still an interim number as the company`s year-end has been moved to the end of September in order to coincide with Siemens Business Services` reporting times (revenue up but earnings well down, and the second six months showing a loss);
• a full-year loss from Igaming (income also well down);
• a good half-year set of numbers from Infowave (revenue up and profit well up);
• disappointing interims from Control (revenue up but earnings well down);
• interim losses from Advtech (and revenue only up a fraction) and iTouch (but revenue well up);
• and the final order for the liquidation of OAI.

Additionally, the shares of Core Holdings were suspended from the JSE; those of Edutech (the re-named and restructured Contlan group) added to the Venture Capital board; the listings of Y2Ktec and Y3K annotated to reflect that the financial results of both companies are facing modified audit opinions, the shares of Metropolis should be de-listed on 26 October; and Dectronic announced that it is undergoing a rescue operation by Gandalf Trust.

[Local]

Other local news included:

• the break-up announcement of Ixchange, leaving it with only FrontRange Solutions, the name of the new entity;
• the appointments of Chris Bray as country manager for Network Associates, Doug Leather as MD of Intact Solutions and Chris Sinclair as CEO of IQ Business Group`s SA operations, with group CEO, Johan Roets focusing on the company`s European operations;
• the resignation of Derek Kreunen as CEO of the Ixchange Group, and the appointment of Dana Buys as its new CEO;
• the resignation of Graham Hayes, group MD of Maxtec;
• the news that Core Holdings directors, Kathy Fielding and her husband David Allen had fled the country, although being required to appear before an inquiry into the liquidation of Redsand Interactive, a Core subsidiary;
• Gary Harlow, CEO of Unihold, will head up the group`s offshore operations;
• the restructuring of Global Technology, which is to include a share split;
• the announcement of a reorganisation at Datacentrix;
• the news that Softline has reduced its dependency on SVI Solutions through a reduction in its shareholding of its subsidiary that involves a share swap with Irish software house Integrity;
• the announcement that the Brainware share suspension will be lifted tomorrow and the listing transferred to the cash companies sector; and
• the details of the restructuring at Rubico

• the announcement that Guardian IT, the UK-based data storage and disaster recovery group, would withdraw from the Web hosting market;
• the news that British Telecom has re-named its wireless division, O2, ahead of its spin-off later this year, and that it would de-list from the Tokyo Stock Exchange;
• the official unveiling of Damovo, a London-based group created from the sale of Ericsson`s enterprise business to Apax Partners and headed by Pearce Flynn, the Irish-born businessman who oversaw the sale of Newbridge Networks to Alcatel;
• the closure of Linux database vendor, Great Bridge, NetObjects and Silicon Film Technologies;
• the name change of Lotus Development Corporation to Lotus Software Group;
• the news that the DOJ will not seek a break-up of Microsoft;
• the denial by KPN that it might sell E-Plus, its German mobile subsidiary; and
• the announcement that a re-negotiation of the Pirelli/Olivetti deal is on the cards.

Additionally, watch out for the possible acquisition of AT&T`s cable TV business by AOL, with Cox Comms also a contender; the fate of the world`s third largest DRAM manufacturer, Hynix Semiconductor, as it struggles to stay alive; the eventual fate of Lernout & Haupsie; and the possible acquisition of Baltimore Technologies` content technologies operation by SurfControl.

[International]

Other international news included:

• the appointments of James Barnett as CEO of AltaVista, Stephen Burke as president and CEO of vVault, Carl Conti as chairman of Adaptec, Bruno d`Avanzo as chairman of Storm Telecomms, Pearce Flynn as CEO of Damova, William Krause as chairman and CEO of Exodus Comms, Gerald Perkel as president and CEO of Merant, Michael Ross as COO of Xplore, Charles Sansbury as CFO of Vignette, Ad Scheepbouwer as CEO of KPN, Neil Selvin as chairman and CEO of Pivia, and Paul Stich as president and CEO of Peak XV Networks.
• the resignations of Ellen Hancock, chairman and CEO of Exodus Comms, Sir Roger Hurn, chairman of Marconi, Jack Iacobucci, president and CEO of Rogue Wave Software, John Lodge, CEO of Rolfe & Nolan, Lord Simpson, CEO of Marconi, Bob Terwilliger, CEO of ARC International, Stan Wang as CEO of Viador, Richard Wills as chairman of Tektronix and Anthony Vidal as COO of InfoVista SA;
• the deaths of James Hatden, CFO of Netegriry and Danial Lewin, one of the founders of Akamai Technologies, just two of many from the WTC calamity; and
• job loss announcements from 3Com, AltaVista, Anixter International, Applied Materials, Celestica, , Lernout & Haupsie, LSI Logic, Lycos Europe, Marconi, Matsushita Electric, Motorola, Quest Comms, Red Herring Comms, STMicroelectronics, Teradyne, Toshiba and Verio.

We saw excellent figures from Able Electronics and SurfControl.

Good numbers were recorded by Ansoft, Atos Origin, Global Payments, Intermagnetics General, InterVoice-Brite, ITnet, Logica, Orange (back in the black), Telefonica, Trace Computers and Vislink Group.

Satisfactory figures were posted by California Amplifier, Docucorp International, Esterline Technologies, Gtech (back in the black), Riverstone Networks (back in the black), Telefonica, Tibco Software, Trio-Tech International and Workflow Management.

Mediocre returns came from Adobe, China Unicom, Cognos, France Telecom, Geac Computer (back in the black), Jabil Circuit, Methode Electronics, Oracle, Portugal Telecom, Progress Software, Ross Systems (but back in the black), Tektronix and Telecom Italia.

Very poor results were turned in by Memscap SA (but back in the black) and VoIP Telecom (but back in the black).

Losses came from 3Com, AimGlobal Technologies, Caldera, Cognigen Networks, Datatec Systems, Eidos Plc., Electro Scientific Industries, Exchange FS, Exus Networks, FastComm Comms, Forgent, Globecomm Systems, Globus Wireless, Guardian IT, Horizon Technology Group, iBIZ Technology, Infosources Group SA, Knowledge Support Systems Group, KPN, Marlborough Stirling, MKS, National Semiconductor, Netgem SA, Orchestream, Palm, Parity Group, Proginet, Red Hat, Solectron, Sorrento Networks, Spectrum Control, Staffware, Standard Microsystems, SurfControl, Triton PCS Holdings, Verity, Versus Technology, Volt Information Sciences, Voss Net and Wanadoo.

Other financial news included profit warnings from Adobe, Alcatel, Allen Telecom, Alliance Semiconductor, Anadigics, Anixter International, ARC International, August Technologies, AXT, Cable & Wireless, Caldera, Cedar, Comino, CVS, Eastman Kodak, EMC, Ericsson, Evolving Systems, Inrange, Insituform Technologies, IQ Ludorum Plc., JDS Uniphase, Manugistics, Marconi, Matsushita Electric, Mitsubishi Electric, Motorola, NTT, ONI Systems, Oracle, Philips Electronics, Quest Comms, SanDisk, Sanmina, SPX, Tadpole Technology, Take-Two Interactive Software, Tanning Technology, Tektronix, Teradyne, Tibco, Toshiba, Verity, VISX, Vitesse Semiconductor and Xilinx.

Share split announcements from Caldera (reverse), Glenayre, Micron Solutions, NetManage (reverse), Nvidia and Wolfpack (reverse); and a withdrawn IPO from WebGain. Additionally, JDS Uniphase has had to re-state its fourth quarter loss with an additional write-down of $5.3 billion.

Locally

Cape Empowerment Trust (+33.3%)
Datatec (-40.7%)
Dimension Data (-43.3%)
E-Data (-62.5%)
Hicor (-44.4%)
Ixchange (-55.8%)
Jasco (-33.3%)
PTH (-50%)
Sempres (-33.3%)
Y3K (+50%)

Internationally

Aspect Comms (-62%)
Atlantic Telecom (-77.8%)
Aqua Online (-28.9%)
Axon Group (-61.5%)
Cedar (-93.3%)
CacheFlow (-60.6%)
Comino (-63.6%)
INT Media Group (-60.7%)
Invensys (-61.5%)
Marconi (-62.3%)
Smartlogik Group (-61.1%)

Key3Media Group has announced that from September next year, Comdex in the US will move from Las Vegas, where it has been held since 1998, back to Atlanta, where it was originally held. Comdex 2002 is probably going to be the first major activity in the newly expanded Georgia World Congress Centre that is intended to be finished about the middle of next year. The event will run concurrently with NetWorld and Interop.