Megabuyte - Technology sector intelligence

We initiate coverage on Rackspace Ltd, the private UK subsidiary of the US-based and listed hosting and cloud computing solutions provider Rackspace Hosting, accounting for a quarter of the parent’s revenues in FY09.  Rackspace Ltd has turned in an impressive performance in the last two years, doubling revenues and trebling EBITDA to £100m and £37m respectively to FY09, as a result of broadening its product portfolio from managed hosting solutions into cloud and other new solutions. Recent results from the parent company showing 23% revenue growth in the 9 months to September 2010 suggest that the UK subsidiary continues to perform strongly. Premium subscribers can see the analysis here, whilst Premium Plus readers can also see the company profile here.

Micro Focus reveals extent of AMQ decline

Infrastructure software vendor Micro Focus has issued its interim results this morning which confirm the trading patterns outlined in the recent IMS (Premium Plus subscribers see here for details). Revenues for the six months to October increased 11% to $215.6m but this included a contribution from acquisitions; on an underlying basis revenues declined by 5%. Underlying EBITDA nudged up 1% to $79.0m but this was after a $3.3m adverse currency movement so the underlying performance was somewhat better. See Newswire Plus for more.

M-PESA’s mobile money offering goes from strength to strength

Latest results from Safaricom show the enormous potential of mobile money in emerging markets, with M-PESA now used by a third of the Kenyan population, registering growing ARPUs despite strong growth in subscribers, and accounting for 11% of Safaricom revenues. M-PESA’s 20,000 agents have become the de facto bank branch infrastructure in Kenya. This is all good news for Monitise, which as well as building a market leading position in mobile money in the UK and US is also focussing on emerging markets. See Newswire Plus for more on the latest M-PESA metrics.

Market weakness slows Orchard

Orchard Information Systems, an independent supplier of IT solutions to the local authority and housing sector, failed to replicate its recent strong performance in 2010. For the year ending April, Orchard saw a marginal decrease of 3% in its turnover to £10.8m although the proportion of recurring revenue did grow to 54% from 52% in 2009. Higher cost of sales and a decline in revenue weighed on margins resulting in a decline in EBIDTA of 7% to £1.0m. Newswire Plus has more.