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To: ms.smartest.person who wrote (220)	2/1/2001 2:14:19 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 307

2/1/01 [OPNCF] Australian tech stocks douse cash burn rates By Sophie Hares SYDNEY, Feb 1 (Reuters) - Australian technology firms have slashed staff and costs in a desperate attempt to douse their cash burn rates, but it may not be enough save those with poor business models, broker JP Morgan said on Thursday. The gulf was widening between firms which have boosted their customer receipts and slowed burn rates, and those with barely enough cash to last another year, JP Morgan said in a report on December quarter cashflows. "While this cost base management is a positive for the short term survival of the group as a whole, it only prolongs the underlying problem - many of these small Internet-related companies are far from having profitable business models," it said. Twenty-eight of the 62 firms surveyed had only enough cash to cover less than a year if they continued to spend at current levels, according to their quarterly reports, the broker said. The poor performance of these firms was casting a pall over the whole sector, making investors jittery about pouring capital into stronger tech firms, and the report predicted the ultimate decline of some tech stocks. "This should be interpreted as a healthy long term occurrence because their current existence taints the group as a whole." A further 23 firms surveyed had negative operating cashflows, but had a firmer grip on their costs. Fourteen of those had enough cash to last up to two years while stand-out emitch Ltd could survive for decades at its current cash burn rate, according to the report. Ecorp Ltd, with almost A$90 million cash in the bank, was in the strongest position of the 11 cashflow positive firms surveyed by JP Morgan, followed by Melbourne IT Ltd with A$25.4 million cash on its balance sheet. Customer receipts showed a strong turnaround in the December quarter, with firms posting a 47.5 percent rise in receipts compared with an 18.6 percent drop in the previous quarter. Telco software group Open Telecommunications bolstered its receipts by 222 percent, while ecorp's customer receipts were up around 90 percent for the quarter. (c) Reuters Limited 2001 REUTER NEWS SERVICE au.dailynews.yahoo.com

To: ms.smartest.person who wrote (220)	2/1/2001 2:44:52 PM
From: ms.smartest.person	Respond to of 307

[MLBEF] MELBOURNE IT LIMITED FOREIGN - Australia No US quote available <info included in post> Yahoo Finance Australia & New Zealand Quote: au.finance.yahoo.com Australian tech stocks jump, but investors wary SYDNEY, Jan 29 (Reuters) - Australia's major technology stocks have climbed off their lows since the start of the year as they catch a ride on Nasdaq's coat tails, some rising sharply in value. But while retail investors scrape tech stocks off rock bottom, heavyweight fund managers are sticking close to the sidelines, wary of dipping back into the market ahead of February's company results. "The fact is these stocks were absolutely hammered, especially in the last two or three months of 2000. You cannot overstate the low base," says Mara Bun, Internet strategist at Macquarie Equities. Domain name register Melbourne IT Ltd , once the local market darling, has helped lead the surge since the start of 2001, rallying more than 80 percent. Software group Reckon Ltd has leapt 43 percent over the past three weeks and online broker E The gains are impressive, but it's worth noting Melbourne IT is still 93 percent off its record A$17 high reached before last year's tech stock crash, and most key stocks are trading at least 50 percent below their top levels. While institutional investors may feel some stocks have been heavily oversold and there are bargains to be had at these levels, many fear the reporting season will show firms are still failing to meet over optimistic earnings targets, and reneging on pledges to dose their cash burn rates. "The feeling they've bottomed out is gaining momentum, but where to from here?" says Michael Willoughby, emerging and technology companies analyst at JP Morgan. "It largely depends on sentiment in U.S. technology stocks and a lot will depend on macroeconomic changes, whether they do cut interest rates," he said. Further easings by the Federal Reserve might help Nasdaq extend its 12.6 percent rally so far this year, and subsequently give Australian tech stocks a lift. But analysts caution that the mere whiff of a hard economic landing is likely to see corporates tighten their purse strings, and quickly cut back spending on new technology. Software, security and smartcard groups are likely to be the most watched on institutional investor radar screens for the time being, while firms taking drastic steps to slash their spending and secure concrete revenue streams will also be viewed favourably. "It's almost every day now you hear of an internet company in particular laying off staff or cutting costs to become cash flow positive more quickly," Willoughby said. And with all major tech firms expecting to post steep losses for at least another year, it's going to be a long time before investors can revert to more traditional price/earnings ratios to value their investments. Name RIC Business Price % chg % chg on day in 2001 Adultshop Online sex shop 0.35 -18.89 114.71 Melbourne IT Domain names 1.19 -2.94 83.08 E27 -3.79 53.01 Spike Networks Online media grp 0.25 unch 48.48 Reckon Software 0.23 -6.12 43.75 Open Telecoms Telco software 1.44 -0.69 28.00 Davnet Telecoms 0.60 -1.64 26.32 Solution 6 Software 1.32 -2.94 19.98 Secure Net E-security 5.73 2.14 19.20 MYOB Software 2.27 -0.44 13.50 Sharon Austen Online sex shop 0.20 -6.98 11.11 Catuity Inc Smartcard group 11.00 -7.95 0.92 ERG Smartcard group 2.76 5.75 0.77 eServe IT solutions 1.20 4.35 unch Sausage Internet group 0.68 -4.23 -1.45 Keycorp Smartcard company 8.00 -1.17 -13.60 Ecorp Internet portal 1.25 -1.57 -19.09 Technology One Software 1.25 -0.79 -43.18 c) Reuters Limited 2001 REUTER NEWS SERVICE -------------------------------------------------------------------------------- au.dailynews.yahoo.com