Mergers, listings and results

The top international headline grabber last week was the $60 billion merger of Comcast and the MediaOne Group, the third and fourth largest US domestic cable providers, to create the world`s leading broadband communications provider. At home, new listings and several sets of full-year and interim results made the news.

• we saw excellent full-year numbers from Integrated Health Technologies;
• excellent interim results from Maxtec;
• good interim numbers from MMW Technology Holdings and Whetstone Industrial Holdings;
• satisfactory maiden interim figures from Y3K;
• disappointing interim results from SFG (includes Pinnacle IT Group);
• the listings of Cycad Financial Holdings, Hix Technologies and Smacsoft;
• the announcement that Archway Venture Partners (10%) and Quaestor Equity (10%) have invested in ITWeb;
• the news that software companies Stardust Technologies Holdings and Synergy Holdings intend to list on the development capital sector of the JSE; and
• that outsourcing, staffing and education group Paracon Holdings (50% owned by Educor) also intends to list on the JSE.

[Local]

Local Cautionary Notices (see attachment)

Other local news included:

• the announcement that Core Holdings subsidiary, Internet Strategies, and Yahoo! have concluded an exclusive agreement under which the former will represent Yahoo! throughout sub-Saharan Africa; and
• the launch of a new IT company, Original Co-Sourcing SA (Orico), targeted at the local insurance sector.

• we saw the continued rationalisation of Canada`s telephone industry with a four-way merger involving NewTel Enterprises, Bruncor, Maritime Telegraph & Telephone and Island Telecom;
• the announcement of layoffs by Hutchinson Technology;
• the news that Olivetti has secured a $24.5 billion loan to help finance its bid for Telecom Italia;
• the launch in the UK of five free Internet access services; and
• it seems that Yahoo! is holding talks with Broadcast.com regarding a possible acquisition involving a stock swap.

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

Other international news included:

• the restructuring (including layoffs) of Cabletron Systems following yet more losses;
• the appointment of the former financial officer for IBM Americas, James Mooney, as the new CFO for Baan;
• the announcement by Cisco that it is planning some 10 acquisitions over the next 18 months to beef up its Asian presence;
• rumours that Cable & Wireless will take-over Japan`s International Digital Communications in a deal worth nearly $500 million; and
• rumours that MCI WorldCom might buy Nextel Communications, or that the latter may enter a joint venture with America Online.

We saw excellent figures from CFS Group, CRC Group and Quality Software products. Losses came from Accent Software, Allstar Systems, Aspec Technology, Cabletron Systems, Convergent Comms, CoreComm, Corel (revenue also down), Digital Lava, Elcom International, FSI International (more than expected), Infodata Systems, LDI, MAI Systems, Microlog, Omnipoint (although revenues more than tripled), OpTel, Premiere Technologies, S&T System Integration & Technology Distribution AG and SBA Comms.

Good numbers were recorded by 3Com (better than expected), Best Software, CellStar, CT Comms, Gemplus SCA, Learning Company (back in the black), LG Semicon (back in the black), Micron Technology (back in the black and better than expected), NTS Computer Systems (back in the black), Pacific Internet (back in the black) and SAS Institute (income not disclosed). Satisfactory results were reported by CHS Electronics (re-stated) and GCI.

Mediocre returns came from Acer, DSP Technology, Merix, Pegasus Group and Veba AG, while very poor results came from Micron Electronics (income down over 80%) and TMSSequoia.

Other financial news included profit warnings from Acer, Aztec Technology Partners, Ericsson, IMSI, Inacom, International Microcomputer Software, Network Technology, Read-Rite (loss expected), SAP, SCI Systems and Verilink. There was also the announcement that Wang Global has to re-state six quarters` earnings, the news that PSINet is re-stating its fiscal 1998 figures, and the announcement that SystemsSoft is to file for Chapter 11 protection.

Locally

Core (+33.3%)
Cyberhost (-22.7%)
Decillion (-24.3%)
Healthtec (+37.1%)
JemTech (+19%)
Selective Financial Group (-34.3%)

Internationally

CHS Electronics (-47%)
Datapoint (+80.2%)
Fujitsu (+19.7%)

Hutchinson Technologies (-33.5%)
Inacom (-45.8%)
Platinum Software (+34%)
Project Software (+19.8%)
Psion (+23.2%)
QAD (+31.8%)
Qualcomm (+31.9%)
Read-Rite (-23.9%)
Telxon (+46.6%)

Microsoft shares hit an all-time high amid news that the company will meet with anti-trust prosecutors this week to discuss settling the dispute. Maybe this will lead to the long-awaited and continuously delayed re-structuring.