FINaNCIaLS
Technology stock hit
SOFTWarE cont... % month Mkt cap
Price (4)
10.03.08 - 10.04.08
change 4
P/E ratio
m
A total of 13 warnings were issued by 13 companies in Q1, rising from nine in
the last quarter of 2007, which amounts to 18% of the FTSE sector. The sector
Sun Microsystems 9.75 -4 7728 18
had demonstrated better forecasting and conditions in 2007, with warnings
Sybase 16.48 3 1470 16
declining steadily from 17 in Q1 2007 to just nine in Q4 2007. However, the
news will come in reflection of current market conditions, as customers
Symantec 10.95 2 9270 46
continue to tighten their belts. James Bennet, technology director at Ernst
Vignette 7.73 4 190 14
& Young explains: “2007 was a good year for most software and services
stocks. This reflected strong growth in the marketplace and growth in global
technology stocks.”
“This, however, has been marred with quite a challenging 2008. Technology
IT Services
Price (4
% month Mkt cap
) ratio
stocks have been pretty hard hit, with organisations selling to the financial
10.03.08 - 10.04.08
change 4
P/E
m
services sector particularly feeling the pinch as many projects have been put
on hold. Broadly, confidence in the marketplace is affecting spend and delays
Beko 3.20 3 58 33
in projects going ahead will be affecting clients now and in the future.”
S&T 10.58 -8 94 9
In Q1, all companies in the sector issuing a warning had a turnover of under
£200m.
Basware 8.03 3 92 22
‘Sales short of forecast’ was the biggest reason for all the warnings in the
Satama/Trainers’ House 1.16 -4 79 10
sector. In related sectors, there were seven profit warnings from Technology
Hardware & Equipment companies, up from three in the last quarter (a 133%
Solteq 1.55 0 19 17
increase). These were issued by seven companies totalling 14% of the sector.
SysOpen Digia 2.98 -4 62 10
Continuing, Bennet says, “The reason for so many profit warnings is a result
of confidence in the marketplace being hit, instability in the financial markets
TietoEnator 16.27 47 1172 5
and companies generally being cautious about committing to significant spend.
TJ Group 0.06 0 8 -
There is likely to be significant slippage with companies over the next six to 12
Altran 5.25 12 621 -
months.”
Atos Origin 36.50 9 2544 52
asseco, which built its expansion strategy on buying small firms across Europe,
Bull 2.64 3 256 -
wants to buy businesses in Germany and the Benelux. CEO Adam Goral, was
reported to say he wants the German unit created from taken-over firms to
Business & Decision 11.70 -38 102 9
initially have a net profit of €15m annually and list on the Warsaw bourse in
Capgemini 36.64 8 5328 12
the first quarter of 2009. It already has two small IT firms AP-AG and Matrix24.
but is thought to be looking for companies with financial services experience.
Cegedim 50.31 0 469 13
Now with Polish rival Prokom under its belt, Asseco is the largest IT company Coheris Atix 3.00 -7 17 11
in Poland and a heavyweight even on a European scale. It targets net profit of
Devoteam 21.00 8 206 12
250m zlotys (€74m) and sales of 3bn zlotys (€880m) in 2008.
GFI Informatique 4.13 -1 224 15
French technology consultant altran posted better-than-expected full-year
Sopra 47.63 8 556 10
profit thanks to higher sales and cost cutting and said it aimed to reduce
expenses further this year. As one of Europe’s largest technology consultancies,
Steria 21.47 15 605 8
it said it wanted to maintain a sales growth pace comparable to that of the
Umanis 0.73 0 18 -
market despite economic uncertainty and that the start of the year confirmed
Valtech 0.38 -7 34 9
the trends of the end-2007.
Cenit 0.05 -20 1 -
Operating profit before exceptionals rose to €99.4m from €76m in 2006.
GFT 0.00 -26 13 -
Operating margin rose to 6.2% of sales against 5.1% in 2006 while net profit
rose to €21.6m from €3.8m the previous year. Altran said it had reduced indirect
IDS Scheer 10.15 2 325 15
costs by 1.2 percentage points in 2007 and these costs accounted for 26.3%
Pixelpark 0.57 -17 9 19
of revenue at the end of 2007. It aimed to reduce these costs to around 20%
of sales this year. Altran is working on several refinancing scenarios including
Plaut 0.70 3 8 -
tapping the market or seeking banking credits. The group is also discussing with Siemens 70.83 -12 64753 16
its existing bankers and with a new bank the terms of a new mid-term credit
SinnerSchrader 1.62 1 19 18
line and the adjustment of existing credit lines.
Synergon* 4.99 -8 48 24
Checkpoint Systems reported fourth quarter revenues up 21% versus a year
ago, continuing a strong growth trend in all businesses and consistent with

the momentum it saw during the preceding quarters. Recent acquisitions
S

ource: Thomson Financial Datastream
*Share price now shown in Euros
18 apr 2008 29
It0807 - 26-31_financials.indd 29 16/04/2008 11:00:26
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