27 Jun 05. Serco, the contract and facilities management group, said on Monday it was trading in line with expectations after it achieved “significant” growth during the first six months of the year. The group, which generates about three-quarters of its business in the UK predominantly in the defence sector, remained confident of its ability “to deliver strong and profitable growth, both this year and for the foreseeable future”. In a six-monthly trading update Serco, which has benefited from the trend to use outsourcing as a means of keeping down costs, said it had achieved organic growth, as well as on the back of recent acquisitions. Last year the group bought RCI, an American IT services company, for $215m and ITNet, a British IT services group, for £235m ($430m). The group said on Monday that in the short-term it wanted “to bed down” these two acquisitions before it would consider other purchases of a similar size. Serco said the integration of RCI, which is a supplier to the Pentagon, was trading very well and that it was encouraged by the rate of new business. Serco has also successfully rebid for a contract to help retiring US Army soldiers and officers find jobs in the private sector. There remained a slight shadow at ITNet, where Serco said revenues were expected to be below last year’s first-half result, “as anticipated”. However Serco said the group was on track to deliver the expected cost savings and the business was continuing to win new business. The group said the phasing-in of the Northern Rail franchise, a north of England rail service it operates with NedRailways, was proceeding well and the franchise showed a strong operational performance in the first half. Analysts said that, having only updated investors a week ago, there were few surprises and that much of the rise in shares occurred after the acquisitions were announced. They said the focus would now be on how many new contracts RCI and ITNet could secure. Serco is forecasting full-year pre-tax profits of about £94m under UK GAAP, or about £89m under IFRS, the new accounting standard. The group will release its interim results on August 31. (Source: FT)
28 Jun 05. Sun Microsystems, the troubled IT systems group, has continued its recent buying spree with the acquisition of Seebeyond, a California-based software company, for $387m. SeeBeyond stockholders will receive $4.25 a share in cash, a 29 per cent premium to Monday’s closing price. Sun earlier this month surprised Wall Street by paying $4.1bn for StorageTek, a maker of data storage equipment. Seebeyond specialises in software that helps companies link computer systems. Its products are built around Sun’s Java technology. On Monday, Sun stepped-up its efforts to woo the open-source software development community by releasing more computer programs under a “free” software licence. The company said it would publish its Java Application Server on terms that allowed customers to use and alter the product free of charge, on condition that changes were shared with other users. (Source: FT)
27 Jun 05. Sun Microsystems has stepped-up its efforts to woo the open-source software development community by releasing more computer programs under a “free” software licence. The troubled IT systems group said it would publish its Java Application Server on terms that allowed customers to use and alter the product free of charge, on condition that changes were shared with other users.
The move gained mixed reviews on Wall Street. “This doesn’t fix the biggest problem at Sun: lack of secular revenue growth,” said David Wong, analyst with AG Edwards in New York. Sun stock close unchanged at $3.70 on Monday. Sun prospered in the late 1990s as the leading seller of servers running the Unix operating system. But it has struggled to deliver growth or consistent profits since the dotcom and telecom bubbles burst. Scott McNealy, chairman and chief executive, is trying to win back customers by making Sun software av