The ANZ Banking Group has put its hand up as a founding member of a business venture in trade services transaction processing that aims to enable banks worldwide to streamline their trade operations, such as letters of credit and collections. ANZ's partners in the venture are American Management Systems, Bank of Montreal, and Barclays plc.
A spokesman said the venture, which is scheduled to be operating by mid-2001, will use a new business model and Internet-based technology to offer services to banks and their customers around the world. The services will aim to increase the efficiency of transaction processing and provide an Internet trade portal for banks and their corporate customers to initiate and track trade services transactions.
The ANZ, as well as Bank of Montreal and Barclays, will contract their back office trade services transaction processing to the new company.
"ANZ is now making a substantial step that places it at the leading edge of trade services globally," claimed Roger Davis, group managing director of financial services at ANZ. "Customer servicing will be delivered to customers by ANZ trade specialists utilising the latest Internet-based technology platform. Customers will also be able to manage their trade transaction requirements on this platform."
Telstra's Asian dalliance leaves market coldInvestors knew Telstra's wide-ranging alliance with Pacific Century CyberWorks was going to happen, but they didn't like the final terms and marked Telstra's share price down accordingly. Their mood didn't improve after they had slept on the details with the result that the share price continued to fall on Friday.
The problem appears to be that while stock markets around the world have dramatically changed their attitudes to high tech stocks since the deal was first nutted out, the deal itself hasn't changed much to reflect that. Telstra's contribution seems disproportionately large.
The main components of the deal, which intends to create three joint venture companies to capitalise on the regional growth in data, Internet and wireless communications, are:
A merger of some businesses of the two companies to create a 50:50 IP backbone business, with PCCW injecting debt of up to $US1.125 billion and Telstra $US650 million;Telstra's purchase of a 40 per cent stake in PCCW's Wireless Co mobile business for $US1.5 billion, with an option to move to 50 per cent within 18 months. A spokesman said the Wireless Co will aim to establish a pan-Asian presence through alliances, commercial agreements and other mechanisms.
Creation of a 50:50 data centre joint venture that will develop a network of Internet data centres throughout Asia. The centres will provide a range of Internet and e-enabled services, initially focusing on hosting services, the spokesman explained.
PCCW's issue to Telstra of $A1.5 billion subordinated convertible notes.
Dr Ziggy Switkowski said the original MOU had been expanded to include the joint venture agreement for a data centre business and co-operation in broadband product offerings, including PCCW's Network of the World Internet services in Australia.
Business briefs on the home front
When it was suggested that storage is boring Tom Mendoza, the visiting president of Network Applications, agreed. "It's plumbing," he told a press conference in Sydney this week. But it is also highly lucrative if - as in Network Appliance's case - you can find a niche. Mendoza pointed out that two years ago the company grew 80 per cent, last year it grew 100 per cent and in the 1999/2000 financial year it grew 124 per cent (see last week's Rust Report). Mendoza noted that storage now accounted for 40 per cent of the average IT budget, although some observers claimed its share was 50 per cent. "If I can tell you I can take money off that you're going to listen," he explained. "Our goal is just don't screw it up".
ASX-listed technology solution provider Chrome Global has agreed to form a joint venture with Singaporean company Systems for Health Management to provide e-business solutions for healthcare to customers in the Asia/Pacific region. The two will build the business on their respective health and business packages, but will also examine other potential areas of interest, including application service provision.
Sydney software developer Senacon, which this week launched a suite of integrated business applications for SMEs, has received an investment of $A250,000 from JAM Development Capital.
Telstra has called off the sale of some of its e-business assets to Solution 6. While the sale has been abandoned, the two companies have agreed to work together on other e-business projects.
Software developer Clarity International, in which Powerlan holds a 51 per cent stake, is seeking to list on the ASX after undertaking an IPO to raise $A3 million through the issue of 50 cent shares. Powerlan will retain a 41 per cent shareholding in the company, which will have a market capitalisation of $A25 million. Calarity has developed a suite of telecommunication operational support system products for the international telco and service provider market.
Iocom has bought River Technologies, a Victorian systems integrator for SMEs, for 500,000 options exercisable at 90 cents. River Technologies operates in Queensland and Victoria and generates annual revenue of about $A1 million. It will be integrated into Iocom Solutions.
Corporate quarters at home
Listed telecommunications and technology player Pracom lifted revenue 230 per cent to $A146 million in the year to June 30, when its earnings before interest and tax prior to abnormals rose 202 per cent to $A9.1 million. The company recorded a net profit after tax of $A3.5 million. A spokesman said that while the company's acquisitions had made a substantial contribution to recent growth, key to the year's success had been the speedy integration of four new business acquisitions and the disposal of one small business unit. "In each case the principals of the business being acquired remained with the group, benefiting Pracom through the retention of their entrepreneurial skill in the company, while introducing the discipline and infrastructure appropriate to a substantial public company," the spokesman added.
Recently listed telecommunications solution provider Open Telecommunications lifted revenue to $A23.96 million in the half year to June 30. In the first half of the 1999/2000 financial year revenue had been $A8.55 million. Net profit after tax of $A1.59 million almost accounted for a loss of $A1.96 million in the first half. "This is a very strong result for the six month period and comes immediately after the company exceeded its prospectus forecasts to 31 December 1999," noted managing director Wayne Passlow. "Our earnings outlook for the remainder of the financial year to 31 December 2000 remains strong." The company's prospectus had forecast revenue of $A53.9 million for the 2000 calendar year.
Listed software seller Reckon chalked up a profit of $A37,000 in the six months to June 30 when total revenue grew from $A6.98 million a year ago to $A36.14 million. A year ago the company lost $A3.07 million for the half. A spokesman claimed Reckon now has a national registered customer base for the QuickBooks software of almost 400,000. "Based on historical trends, between 25 per cent and 30 per cent are expected to upgrade annually," the spokesman added.
SecureNet, the listed Australian developer of security solutions for online applications lifted its operating revenue 75 per cent to $A21.1 million in the year to June 30. After equity accounting the company generated an operating profit before tax of $A2.91 million, which was 152 per cent higher than profit for the 1998/99 financial year. During the year SecureNet launched a joint venture in Hong Kong with Cable & Wireless HKT; attracted a $US6 million investment by Intel; forged an agreement covering use of its e-commerce security platform by Pacific Century CyberWorks in return for an investment of $A32 million; and negotiated a partnership with Mondex International to develop smart card products and services.
Corporate quarters abroad
Intuit, the US developer of the QuickBooks software sold so successfully in Australia by Reckon (see above) suffered a decline in revenue from $US168.3 million to $US162.3 million in its fourth quarter to July 31. On a pro forma basis the company lost $US8.2 million for the quarter, compared with a pro forma net loss of $US16.6 million a year earlier. The decline in revenue was attributed to the closure of 22 physical branches as part of its acquisition of Rock Financial, lower revenue than expected from European operations, and Y2K sales skewing revenue for Quicken and QuickBooks into the early part of the financial year.
There was some good news for US Linux systems supplier VA Linux Systems, which lifted fourth quarter revenue more than 500 per cent to $US50.7 million but managed to lose $US47 million - a better result than analysts had forecast. The company claimed that 76 per cent of the world's open source software projects are now hosted on its SourceForge service.
While Linux and the Internet are the hottest topics around, Linux e-business solutions developer Caldera was nonetheless unable to get itself out of red ink in the quarter to July 31. The company lifted revenue a modest nine per cent to $US1.2 million, but lost $US7.5 million. US analysts have begun to lose patience with the company, believing it is falling behind competitors such as Red Hat, and now doubt that its planned acquisition of the Unix operating systems and services divisions of Santa Cruz Operation can reverse its fortunes.