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The general market massacre of the past month has a lot to do with an ongoing adjustment to the excesses of the technology boom. But it is a bit of a surprise that many telecoms companies have proved relatively immune, with the sector falling just 2 per cent since the beginning of July. Other major techMARK sectors have been well and truly battered. IT hardware has fallen by 17 per cent, software and computer services 16 per cent and pharmaceuticals 23 per cent, all in the wake of continuing bad news-flow and even worse market sentiment.

Out, or on the way

In such wretched conditions, fall-out is inevitable. High-speed, fixed-line telecoms play Energis' long-running saga has finally been resolved by way of a trade sale to Chelys. This specially formed consortium of financial institutions, headed by ex-Asda chairman and Conservative Party MP Archie Norman, has put together a refinancing package that may compensate shareholders. But it is probably a long way off. The deal is conditional on the company being sold or floated at a valuation of at least £1.8 billion within seven years. When it departed the market, Energis was valued at just £15.7 million.

Meanwhile e-commerce software company Izodia plans to close following the breakdown of talks that may have led to a takeover. The company is to be wound down as soon as possible and cash, net of creditors, of between 45p and 52p per share returned to investors. The market was not impressed by news that this will take time given significant potential liabilities, for which it wants to negotiate a settlement. It sent the shares south by 26 per cent to 36p.

Alan Sugar has revealed plans to take Amstrad computer spin-off Learning Technology private with an offer 'not in excess of 40p per ordinary share'. Learning, formerly known as Viglen, doubled pre-tax profits to £400,000 in the first half of the year, making 0.38p earnings per share in the process. The company has been increasingly successful in supplying equipment and services to schools, and is therefore well placed to benefit from increased Government spending on education.

Well off the Pace

Digital TV set-top box maker Pace Micro Technology illustrated the extent of the mess that it is in with two profit warnings in the space of a week, the second of which accompanied disappointing final results. The shares, which fetched upwards of £2 two years ago, slumped 67 per cent to 23.5p.

Network Technology announced a highly disappointing set of final figures, showing losses rising from £1.4 million to £4.1 million after big asset write-offs. Turnover was down from £5.2 million to £3.3 million and a forward-looking statement was limited to hope rather than genuine optimism. Its shares fell 0.5p to 3p.

IT services firm Anite crashed 56 per cent to 34p on the back of disappointing predictions accompanying a healthy set of final results. This was its first profit warning in five years.

Back in the groove

Some tech companies are doing rather better. Retail and betting-focused IT solutions firm Alphameric's return to profit was expected. It made £1.1 million pre-tax (including £2.5 million of goodwill amortisation and exceptional costs), compared with a loss of £2.2 million last year. The results were achieved on the back of strong demand feeding straight through to the bottom line. However, the shares fell 16 per cent to 68p.

Bookham Technology did rather better, climbing 6 per cent to 74.5p. This was down to a trading statement in which the optical component manufacturer said sales were in line with expectations, cash-burn had been reduced by 40 per cent and cash reserves stood at £150 million on 30 June. The firm is valued at £107 million.

Coming up

Investors looking for a profit-making software company might like to watch out for insurance industry supplier Sherwood International's interim results – to be released to the market on 5 August. The company's shares have lost a quarter of their value since it released its last final figures in March. But there has been no profit warning, leaving house broker ABN Amro expecting pre-tax profits of around £5 million for the whole of 2002, with earnings of 9.6p. At 90.5p and on a prospective p/e of 9.4, the shares look good value.