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To: SunSpot who wrote (46032)	6/6/2000 12:02:00 PM
From: jackhach	Respond to of 74651

Spescom shifts focus to globalisation strategy 6 Jun 00 Spescom Limited, the JSE-listed Communications and Information Technology (CIT) group, reports a 35% decline in revenues for the first six months of this financial year to R149m, from R228m for the corresponding period last year. Earnings before exceptional items declined from R23m to R15.9m. Costs were escalated due to the group's ongoing major investment in off-shore operations. In April this year the second phase of transactions with US based Altris Software Inc. (ALTS, OTC:BB) were concluded yielding Spescom a 58% controlling interest of the US operation and 100% of the UK company, now known as Spescom Ltd.UK. According to Spescom's executive chairman, Tony Farah, increased costs are inevitable if the group is to implement its global expansion plans. "Through Altris, Spescom now has two fully fledged international operations, complete with world class proprietary technology, research and development facilities, personnel, and established market channels. Our cost of entry was low, in capital terms, and this provides us with a path to take our own technology into high-yield international markets. This will serve as the initial driving force of our international growth strategy. "If we are to realise our vision of making Spescom a multinational player, we must unlock the value of our own technology and this can only be achieved with offshore growth. We believe that the South African investment scenario is earnings driven with little or no worth being attached to intellectual property. If one compares the capital value of non SA based companies possessed of almost identical proprietary technology and development capabilities to that of Spescom, the market capitalisation of these concerns is far higher," says Farah. Integral to the globalisation strategy is Spescom's goal to supply world leading organisations with proprietary software solutions which connect users to the networked economy and manage information. In this regard the company has just announced a major deal with the world's leading software supplier, Microsoft, for the inclusion of the Altris eB© Knowledge Management Software in a worldwide content management system being developed to support its global Product Support Services division. "This is a tremendous endorsement of our technology by the world's leading software supplier which also reflects the strategic value of our acquisition of Altris," says Farah. Farah attributes the diminished turnover to two main factors. Firstly, Telkom placed virtually no business with the group for this period, in spite of the existence of long term supply agreements. Secondly, there was a major reduction in spending by corporate business, government and para-statals, due to the hype surrounding Y2K. He says the results not only reflect the tough market conditions prevailing in the period under review, in terms of a sharp decline in sales, but are also representative of a sluggish economy. He confirms that business prospects are exceptional for the second fiscal half and include the development of a new generation of ADSL (Asymmetrical Digital Subscriber Loop) maintenance test units for one of the world's largest telecommunications service providers. The potential revenue related to this contract is estimated to be between R700m and R1bn, over the next five years. He says local sales are on the increase and notes that Telkom has recommenced placing orders in the current half. "While Telkom remains a valued customer, the reliance on a single buying source for this sector of group business is being eroded gradually with alliances being formed with major telecommunications equipment manufacturers. The Communications Solutions wing of the Spescom group is geared to provide select solutions to network operators and service providers throughout the entire continent." He also confirms that government and private sector corporate business is on the move again. "Spescom is sitting with absolute gems of proprietary technology. Recent contracts with major players, like Microsoft, are indicative of the market potential of these innovative products. Our forecasts are very positive for the second half of this financial year with exciting prospects with world leading companies, which we anticipate will yield an increase in revenue over the same period last year," Farah concludes. --ends-- FOR EDITORS INFORMATION: Spescom Limited Spescom Limited is an investment holding company with operations in the USA,UK and South Africa. Core business is recognised to be the development and marketing of eBusiness enabling software driven solutions for the world market. The group's strategic focus is on the convergence of knowledge, document, product data and voice transaction management technologies. In South Africa, Spescom, in alliance with world leading companies such as Cisco and Lucent Technologies, provides a range of customer contact and intelligent network solutions to its blue-chip customer base. The company is a leading supplier of communications solutions and products to network operators and service providers on the African continent. This is achieved via strategic partnerships with major telecommunications equipment manufacturers including Quante Pouyet/3M, ADC, WWG and Fluke. Via a joint venture with Siemens, Spescom is the worlds leading supplier of revenue management solutions based on its patented keypad technology for the electricity pre-payment market. These systems are installed in 42 countries around the globe. ends