Nadim Mohamed, an investment analyst and partner at First Avenue Investment\u00a0Management, believes that the performance of listed\u00a0IT services companies on the JSE has been a mixed bag.<\/p>\n
“System integrators such as EOH and AdaptIT have performed well and made value accretive acquisitions. We view these as high quality businesses and expect them to continue to gain share in their respective sectors,”\u00a0Mohamed said.<\/p>\n
He noted that Gijima has surprised in terms of underperformance and has lost several large deals such as Absa and SAPS.<\/p>\n
“Net1 UEPS has also dropped substantially after a recent probe into possible corruption by US authorities,”\u00a0Mohamed said.<\/p>\n
Net1 is currently being investigated by the\u00a0US Department of Justice (DOJ) Criminal Division and the SEC, regarding possible acts of corruption in South Africa.<\/p>\n
Shares in Net1 UEPS Technologies fell R37.10 \u2013 more than 55% \u2013 in trade on the JSE on 5 December, after the group said it was being investigated.<\/p>\n
According to Mohamed,\u00a0First Avenue\u00a0views Datatec\u2019s exposure to Europe as being negative in the short-term.<\/p>\n
Datatec said at the start of December, that it is unlikely to reach its published forecasts for the\u00a0year ending February 2013, as\u00a0Westcon\u2019s performance in the third quarter had been weaker than expected.<\/p>\n
\u201cSince the group published its half year results on 17 October 2012, Westcon\u2019s trading in Q3 has been slower than expected and comparatively lower than the same period last year,\u201d Datatec said in a statement.<\/p>\n
“On the distribution side, we think Pinnacle has a strong position as the largest player within most of its categories and strong ability to predict industry cycles \u2013 they have made excellent acquisitions and we think it is trading at a reasonable level given its excellent record of growth even during weak economic cycles,” Mohamed said.<\/p>\n
In September, ICT group\u00a0Pinnacle Technology Holdings<\/a>\u00a0increased headline earnings per share by 49% from 117.7 cents to 175.1 cents for the year ended 30 June 2012.<\/p>\n Revenue rose by 18% to R5.8 billion with earnings before interest, taxes, depreciation, and amortisation (ebitda)\u00a0up 30% to R419 million.<\/p>\n The group lifted its dividends for the year by 52% to 35 cents.<\/p>\n “Mustek and other hardware-focused players have not been able to achieve the same levels of growth in this market,” Mohamed said.<\/p>\n IT Services<\/strong><\/p>\n Stock return 1 Jan to 12 Dec, 2012<\/p>\n IT Distribution<\/strong><\/p>\n Stock return 1 Jan to 12 Dec, 2012<\/p>\n “For 2013, the key themes in the local tech sector will be mobile data and cloud computing.\u00a0 We believe these will have disruptive effects on existing business models and it will be interesting to see: 1) how fast these trends progress in the local market and 2) who the winners and losers will be,” Mohamed said.<\/p>\n Net1 set for legal action against AllPay<\/strong><\/a><\/p>\n Datatec outlook curbed by Westcon and Sandy<\/strong><\/a><\/p>\n\n\n
\n Code<\/strong><\/td>\n Company<\/strong><\/td>\n % return
\n<\/strong><\/td>\n<\/tr>\n\n ADI-ZA<\/td>\n AdaptIT Holdings Ltd.<\/td>\n 31.3%<\/td>\n<\/tr>\n \n EOH-ZA<\/td>\n EOH Holdings Ltd.<\/td>\n 30.3%<\/td>\n<\/tr>\n \n DTC-ZA<\/td>\n Datatec Ltd.<\/td>\n 25.2%<\/td>\n<\/tr>\n \n GIJ-ZA<\/td>\n Gijima Group Ltd.<\/td>\n -58.3%<\/td>\n<\/tr>\n \n DCT-ZA<\/td>\n Datacentrix Holdings Ltd.<\/td>\n -22.4%<\/td>\n<\/tr>\n \n BCX-ZA<\/td>\n Business Connexion Group Ltd.<\/td>\n 1.8%<\/td>\n<\/tr>\n \n NT1-ZA<\/td>\n Net 1 U.E.P.S. Technologies Inc.<\/td>\n -30.8%<\/td>\n<\/tr>\n \n MOR-ZA<\/td>\n Morvest Business Group Ltd.<\/td>\n -9.1%<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n \n\n
\n Code<\/strong><\/td>\n Company<\/strong><\/td>\n % return<\/strong><\/td>\n<\/tr>\n \n PNC-ZA<\/td>\n Pinnacle Technology Holdings Ltd.<\/td>\n 57.1%<\/td>\n<\/tr>\n \n MST-ZA<\/td>\n Mustek Ltd.<\/td>\n 1.8%<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n Related articles<\/strong><\/h3>\n