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Signs that technology companies, operating in the software sector in particular, may have reached their lowest ebb have intensified in recent weeks following a further stream of acquisition announcements, contract wins and surprisingly upbeat trading results.

November also witnessed the arrival of the first techMARK newcomer for six months, only the third to clamber aboard in 2002. ParthusCeva was formed through the combination of UK-listed Parthus Technologies and Ceva, the licensing arm of US-based semi-conductor firm DSP. It plans to license intellectual property solutions to semi-conductor and electronics sectors.

Software fightback

Leading the software charge was supply chain management software developer Kewill Systems, up a staggering 113 per cent at 24p on the month following the release of an encouraging first-half report. Losses for the six months to September were slashed from £55.1 million to £5.7 million, cash reserves of £21.6 million were ahead of expectations and chairman Andy Roberts confided that 'the board anticipates stronger trading in the second half'.

Also posting a solid interim result was engineering design software developer AVEVA, which reported an improved profit of £1.2 million (£1.1 million) for the six months to September.

Networking and IT training firm Azlan, meanwhile, revealed an expected £1.8 million drop in first-half profits, to £6.2 million, but appeased investors with talk of 'the continued strength of [its] balance sheet' and the resumption of dividend payments. AVEVA and Azlan have gained 12 per cent and 5 per cent respectively in recent weeks.

Communications software firm Orchestream and insurance sector-focused systems developer Sherwood International were among the other strong risers, the former advancing 3.25p to 5.5p as it acknowledged an initial offer, the latter rocketing 88 per cent to 75p on news of a £28 million contract extension.

Orchestream was not the only firm to receive an approach either. Transaction services business Alphyra confirmed reports of a proposed management buyout, believed to be headed by chairman John McDonnell and chief executive John Nagle. However, the company also scotched reports of a rival bid from First Data.

Not all software companies faired so well however. Indeed application management firm iRevolution was punished particularly harshly. The company slumped to a new low of 1p as one institutional investor sold 5 million shares in one day 'at well below the quoted price'.

Vodafone delivers

Telecoms firms and e-tailers also performed well. Mobile phone giant Vodafone surged 10 per cent, to 108p, on one day as it released better-than-expected figures for the six months to September. Revenues increased 67 per cent to £14.9 billion during this period, while profits prior to goodwill leapt 30 per cent to £6.2 billion. Net losses more than halved to £4.3 million.

And with their sector leader fairing well, the likes of BT, mm02 and Orange were able to follow its example and register strong share price gains.

Online travel agent ebookers was another boosted by impressive third-quarter figures, achieving a positive quarterly EBITDA result for the first time in its history. Although the fourth quarter is traditionally the company's quietest, trading since the end of October is said to have been 'good' and overall profitability is expected in 2003. ebookers has leapt 25 per cent to 370p recently.

Developing well

Finally, medical related duo Ferraris and Powderject Pharmaceuticals revelled in good news.

Ferraris, which is developing a range of products for the pulmonary, cardio-respiratory and life-sciences market, saw sales rise 11 per cent on an underlying basis during the full year. With operating margins also rising to 10.4 per cent, the company was able to report profits before tax and goodwill up a third at £5.6 million for the period. A 7 per cent dividend hike affords Ferraris a yield of 5.1 per cent at its current level.

Powderject reported a staggering 340 per cent rise in first-half pre-tax profits to £19.3 million, triggered by a 70 per cent increase in sales. During the period the company 'won a major contract to supply smallpox vaccine to the UK Government, piloted an in-store flu vaccination campaign with Asda, expanded [its] travel vaccine franchise into new markets and significantly increased global sales of influenza vaccine, Fluvirin'.

Looking forward

Hoping not to let the side down next month will be public sector-focused IT consultancy Northgate Information Solutions, a firm due to publish interims to 31 October on 10 December. If the most recent full-year figures to April, showing a £8.4 million (£2 million) pre-tax profit and a bullish AGM statement from chairman Nick Irens, are anything to go by, Northgate should have no such concerns