Olivetti climbs back into favour

LAST YEAR, when Olivetti invited fund managers to come and hear how the Italian computer company planned to staunch the billions of dollars in losses it had suffered since 1991, few investors bothered to show up.

"It wasn't a stock we took seriously and thought worth having," said one of those who shunned the meeting, Paolo Bartalucci at Grifogest, a Florence-based fund manager.

Everyone takes Olivetti seriously now. The company, having shed much of its hardware business and re-emerged as the biggest cellular and fixed- line rival to Telecom Italia, has seen its stock rise six-fold to L3,906 (pounds 1.35) in the last 12 months. In that time, it's the best-performing stock in Italy's Mibtel index.

"No one expected this to happen," said Mr Bartalucci. "Olivetti is a completely different company today. In its old line of business, if you're not the world leader you're in trouble. Now, in telecoms, it enjoys a protected franchise."

The City is a major investor in Olivetti after a number of complex refinancing deals.

Omnitel Pronto Italia, one of Italy's two mobile-phone companies, is the engine of Olivetti's share rise. Olivetti owns a controlling 30 per cent stake in Omnitel through Oliman, a joint venture with its German partner, Mannesmann.

In two and a half years Omnitel has won one-quarter of the Italian market and, with 4 million users, become Europe's fourth-largest cellular phone company.

Omnitel showed a profit one year ahead of target, earning L234 bn in the first half of 1998.

Infostrada, Olivetti's fixed-line telephone unit, will follow Omnitel as the Italian telecommunications industry's next success story. Analysts estimate Infostrada is worth between L2,000bn and L4,000bn - as much as three times Olivetti's entire market capitalisation last August.

With 4,000 business clients, Infostrada has already become Telecom Italia's largest competitor. The company forecasts sales to rise to L1,000bn in 2000 from L120bn in 1997, and it will turn a profit in 2002.

"Omnitel and Infostrada are all that investors care about in Olivetti," said Jonathan Shantry, an analyst at Credit Lyonnais.

This was not the case in the early 1990s, when Olivetti, based in Ivrea, a town in the Alps north of Turin that still calls itself "Informatics City", was known to the world as a maker of personal computers and networking systems.

The PC division was the first to go after Roberto Colaninno took over as chief executive in 1996, as the company's cumulative losses since 1991 reached L4,770bn and investors ousted the chairman, Carlo De Benedetti.

Olivetti's share gains have also been partly down to the perception that the Italian company is an easy takeover target."There is growing interest abroad in Italy's promising telecoms market," said Paola Toschi, an analyst at AFV-Milla SIM in Milan.

News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Life and Style
tech
PROMOTED VIDEO
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
John Terry, Frank Lampard
footballChelsea captain sends signed shirt to fan whose mum had died
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Sport
David Moyes and Louis van Gaal
football
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits