More companies unite

Several multi-billion dollar acquisitions, including Cap Gemini acquiring the consulting arm of Ernst & Young ($11.25 billion), Alcatel purchasing Newbridge Networks ($7.1 billion), SBC Comms buying Sterling Commerce ($3.9 billion) and Global Crossing taking-over IXnet ($3.8 billion), dominated the international world of IT and telecommunications during the last two weeks.

At home, the naming of the Cell C consortium as the preferred third cellular licence bidder and Dimension Data`s potential move of its primary listing to London, made headline news.

• we saw very good year-end numbers from Paracon Holdings (maiden results - attributable profit well up comparatively);

• excellent half-year figures from Aplitec (revenue and income both well up);

• very good interims from CS Holdings (but margins squeezed), Rectron Holdings (but margins squeezed a bit) and Siltek (revenue and earnings well up);

• disappointing interims from Comparex (attributable profit well down) and PQ Africa (revenue and attributable profit both down);

• interim losses from Brainware (revenue also very much down), Metropolis, MMW Technology Holdings (still a loss without the extraordinary item), Spicer (revenue up compared to previous equivalent period) and Systems Publishers;

• satisfactory half-year numbers from Grintek; and

• profit warnings from Contlan and OSI Holdings.

Additionally, Paradigm, which distributes Gateway products, has transferred to the financial services sector from the telecommunications sector, as from today.

[Local]

[Cautionary]

[Calendar]

[Results]

Other local news included:

• the announcement that the Spicer/IQ Business Group merger had been called off;

• the South African offices of Iridium Africa will close its doors by the end of March; and

• the recently appointed MD of Sita, Tebogo Matsoso, has resigned.

• we saw the announcement from Samsung Electronics that it intends to invest $32 billion over the next five years developing six digital businesses. These were named as the semiconductor business where it is already the world`s top DRAM maker in value terms, the CDMA mobile phone handset sector, thin-film transistor LCDs, digital television, printers and next-generation IMT 2000 mobile communications handsets.

• Additionally, there seems to be no shortage of potential suitors for Debis, the IT services arm of DaimlerChrysler. Interest is already being shown by Cap Gemini, which has just successfully bought the consulting arm of Ernst & Young; CSC Ploentzke; Deutsche Telekom; IBM; and Siemens. I wonder if there will be as much interest in Baan, which has indicated that it would be very receptive to a take-over bid.

Additionally, European telecoms companies are surrounded by rumours including the possible IPO of France Telecom SA Internet service provider, Wanadoo; and the acquisition by Deutsche Telkom of Qwest Comms, which is already in the process of taking-over US West; while in the US, SBC Comms and Bell South are reportedly discussing a merger of their respective cellphone operations.

[International]

Other international news included:

• the appointments of Jesse Greene as CFO of Compaq, Raymond Gross as CEO of Davel Comms, Randy Mott as CIO at Dell (formerly CIO at Wal-Mart), Steven Nowick as president of Gtech Holdings, Tim Probert as president and CEO of Input/Output, Lars Procheus, as COO of Intentia International, Jim Taylor as CEO of Intergraph and Nicholas J Williams as president and COO of Network Access Solutions;

• the resignations of Harold Covert, CFO at Adobe, and Robert Annunziata, CEO of Global Crossing;

• the announcements of job cuts by First Data and Hutchinson Technology; and

• the name changes of ATIO USA to Lightning Rod Software and SalesLogix to Interact Commerce Corporation and the selling-off on the stock market, by Mannesmann, of its 2% shareholding in Olivetti.

We saw excellent figures from ASM Pacific Technology, Catalyst Semiconductor, CompuDyne, ICOS Vision Systems, Magic Software, Sausage Software (Australia) and Worldwide Fiber.

Losses came from 3Dfx Interactive, 724 Solutions, Adelphia Business Solutions, Agile Software, Altris Software, Anicom, Arch Comms, Baltimore Technologies, Birch Telecom, Caminus, CFW Comms, Checkpoint Systems, Colt Telecom Group, Comcast, Computer Horizons, DA Consulting Group, Diversinet, Dobson Comms, Dynamic Research, Egghead.com, Exigent International, Focal Comms, Gilat Comms, GSE Systems, Healtheon/WebMD, ICG Comms, ImaginOn, IMSI, Indigo NV, ITI Education, JD Edwards, Level 8 Systems, Log On America, Multiactive Software, Nashua, Network Plus, Nextel, OfficeMax, Osage Systems Group, Pacific Gateway Exchange, ParkerVision, Pathnet, Peerless Systems, Perficient, Peritus Software, Plaintree Systems, Poet Holdings, Prologic Management Systems, PSINet, SAFLINK, SBA Comms, SmartServ Online, Societe Europenne de Communication SA, Solution 6 (Australia), SSA, Startec, Supercom, Tecsys, Telaxis Comms, TeleCommunication Systems, Telecomputing, Terra Networks, Trintech Group, Tritel, UTG Comms International, VA Linux Systems, VendTek, Verio, Vertex Interactive, Viatel, Wavecom SA, Wave Systems, Wave Technologies, Webb Interactive Services, World Access, WorldGate Comms and ZipLink.

Good numbers were recorded by American Cellular, Arrow Electronics, ASM International NV, BEA Systems, Cable Design Technologies, California Software, Cherokee International, Ciena, CMG, Dycom, Dynamic Details, Formula Systems, Gemplus SA, Getronics NV, Infonautics (back in the black), Inter-Tel, Logica, MDC, Millicom International Cellular SA, MSC Software (back in the black), Netcom AB, Netlojix Comms (back in the black), Ortel (back in the black), Pomeroy Resources, Roseville Comms, Safeguard Scientifics, Simtek (back in the black), Tandy, Teletrac, Telefonica Group, The IT Group, US Lec, Valassis Comms and Workflow Management.

Satisfactory results were reported by Autodesk, Cimatron, Classic Comms, Cryptologic, GTSI, Guardian IT, Matsushita Electrical, Rohn Industries, Systemax, Volt Information Sciences and Zing Technologies.

Mediocre returns came from Butler International, Information Holdings, Intuit, Landmark Systems, Lanier Worldwide, Microgen (back in the black), Network Six, Newbridge Networks, Olicom, Psion, Quintel Comms (back in the black), Snyder Comms, Tele Danmark A/S, Wind River Systems and Xeikon NV.

Very poor results came from Evolving Systems (but back in the black), New Horizons, Portal Software (but back in the black), Puma technology (but back in the black), Technisource and Ubics.

Other financial news included profit warnings from Cysive, Litronic, Quantum`s DLT & Systems Storage group (job reduction costs) and Standard Microsystems.

There was also share split announcements from Agile Software, Ariba, BEA Systems, California Software, CMG, CTC Comms Group, Exodus Comms, Getronics, Nextel, Puma Technology and Semitool.

There were IPO filings from Interpacket Networking and SCG Holdings Group (semiconductor components); and very successful IPO debuts by Intersil (semiconductors), Niku (Internet consulting and software), Net.Genesis (e-business), Palm (3Com spin-off), Switchboard (Banyan`s Internet directory subsidiary) and Versata (Internet).

Additionally, California Software announced its intentions to file for a listing on the American Stock Exchange, and Genicom`s shares have been suspended and could spell the end of the road for the company (it has been seeking a buyer for some considerable time).

Locally

C-Tech (+70%)
Casey (-44%)
CIH (+50%)
Dectronic (+33.3%)
I-Fusion (-30%)
JemTech (+450%)
M-Web (+28.2%)
MMW (-29.4%)
Sethold (+77.5%)
Spicer (-43.4%)
Synergy (-33.3%)

Internationally

Applied Imaging (+79.1%)
Aspect Development (+58.2%)
Clarus (+54.6%)
Computron (+69.8%)
Datapoint (+215.1%)
Datastream Systems (+67.3%)
Digital Lightwave (+105%)
ILOG (+63.3%)
Informatica (+58.5%)
Intelidata Technologies (+124.4%)
LanOptics (+92%)
Micro General (+79%)
Mitel (+64.7%)
Network Plus (+78%)
PC Tel (+115.4%)
Polycom (+67.5%)
Quest Software (+56.1%)
Radiant Systems (+57.7%)
RF Micro Devices (+84%)
SBA Comms (+59%)
SRS Labs (+55.4%) |
Triant Technologies (+135.3%)

European telecommunications companies are now waking up and consolidating fast, but tie-ups across the Atlantic will now gather apace (see Deutsche Telekom above), and will have an impact locally. Cell C is tied up with GTE and Bell Atlantic, and there are many organisations waiting to pounce following fixed line deregulation in SA and elsewhere on the continent.