Megabuyte - Technology sector intelligence

Acquisitive security sector player Digital Barriers has announced its third acquisition this morning in the form of AiM listed COE Group. Whereas Digital Barriers’ first two acquisitions (SAL and Overtis) were systems integrators, COE supplies specialist surveillance equipment including a range of cameras and video management software. COE’s revenues for the year to June 2009 were £3.8m but have slipped back somewhat in the last 12 months. We had a chance to talk through the deal with CEO Tom Black this morning and it seems clear that Digital Barriers is acquiring COE primarily for its technology (especially is video transmission software) and that the business will be refocused on Digital Barriers’ core market of national security. Premium subscribers can read our full thoughts following our conversation with Black in Newswire Plus.

Talk Talk suffers from lack of TV

Talk Talk’s first IMS as a separate company is strikingly low key in comparison with the upbeat results for the same quarter published in the last few days by Sky and Virgin (Premium Plus readers see here and here). Revenues actually fell 2% sequentially, compared with rises reported by the peers, suggesting that Talk Talk is lacking scale and desperately missing a TV offering. Undemanding revenue guidance for the year has been maintained. Read our full review in Newswire Plus.

Phone and broadband turns profitable for BSkyB

Following on from Virgin’s strong Q2 results (Premium Plus readers see here), BSkyB has reported a similarly strong quarter (its 4th quarter), with revenue growth edging up 1pp to 12%.  Broadband and telephony revenues grew 31% to £171m, and symbolically turned profitable during the quarter, helped by a big jump in unbundled lines. The soon-to-be-sold Easynet ended the year with 2% revenue growth and significantly reduced losses. Read our full review of the results in Newswire Plus.

Rule Financial maintains strong growth momentum

Privately owned IT consulting & integration supplier to the investment banking sector Rule Financial published its 2009 accounts this week which show continued strong growth in revenues but lower profits, as expected. Revenues for the year to December increased 17% to £27.3m whilst profits were down from £2.0m to £1.2m. The lower margins were attributable to weaker utilisation in the first half of the 2009 and the cost of building an international presence; primarily in New York. We were able to catch up on the phone with Chairman and major shareholder Marcus Rule to get more colour in the results and the outlook for 2010. All Premium subscribers can read our write up of the results in Newswire Plus and Premium Plus subscribers can see our updated financial analysis of Rule on the Megabuyte Database here.

Security software: mixed results under weak Euro and cautious customers

The results of security software providers McAfee, Symantec, Websense and Check Point (covered last week) showed flat to low single-digit revenue growth, though McAfee and Symantec managed decent growth in profitability. All three companies acknowledged the impact of weakening € vs $ on their margins and gave a cautious outlook, signalling a slow recovery in IT spending. However, the trends of consolidation were much in evidence, with all the players having recently strengthened their portfolios through acquisition. Premium subscribers can read our full review in Newswire Plus.

Netcall completes Telephonetics acquisition

Netcall yesterday completed the acquisition of Telephonetics, which at a stroke almost quadruples its revenue base and more than doubles its profitability, pre-synergies.  As we noted at the time of the deal announcement (Premium Plus readers see here), the deal makes strategic sense for both sides, marrying a complementary set of contact centre services, technologies, customers and industry verticals. Since divesting its IVR business (Premium Plus readers see here), Eckoh would be an obvious acquisition target for the much enlarged Netcall.