Outlook: Net gains for Energis
Saturday 29 August 1998
For Energis, this is a somewhat counter cultural purchase since, unlike the rest of the group, and most other internet businesses, Planet Online actually makes money. All the same, Energis is paying a very full price for its slice of tomorrow's world. It works out at pounds 500,000 per Planet Online employee, three times last year's sales and nearly 150 times profits. Then again, this has got nothing on Energis, which valued at pounds 1.3bn by the stock market, has yet to poke its head above the red ink.
The fit is undoubtedly a good one. Energis already carries some 40 per cent of UK national internet access traffic and Planet Online operates in exactly the same corporate part of the communications market as Energis, offering businesses a range of intranet and internet services. Its clients include us at the Independent. The opportunities for cross selling are obvious while the acquisition adds another string to the bow of value added telecommunications services Energis can offer its corporate customers.
Whether all this justifies pounds 75m is anyone's guess. The stock market, which received the news positively yesterday, seems to believe it does, but then the City is in love with the telecoms sector right now and, even in these turbulent stock market conditions, investors seem incapable of viewing it in anything other than a sunny disposition. Apart from poor old Ionica, that is.
It's easy to dismiss this as just the latest stock market fad, but it is a view not entirely without foundation. Telecommunications volume is growing like topsy. Since the causes of this are to do with the information technology revolution, rather than the business cycle more generally, the trend may not be unduly damaged by economic slowdown. Furthermore, there is a growing demand for value added, enhanced services, particularly in the corporate market. So the long-term outlook for this sector is a good deal rosier than most.
All the same, there's a faintly defensive air about this acquisition. Internet service providers are being snapped up all over the place, and mainly by other telcos too. Since internet traffic is such an important ingredient of Energis's present revenue base, this obviously poses a threat, forcing the company to itself engage in a little bit of vertical integration. In the scramble for position in this fast growing market, the risk of overpaying is all too obvious.
- 1 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 3 Israel-Gaza conflict: The myth of Hamas’s human shields
- 5 Dutch paedophile club to fight their ban at the European Court of Human Rights
Lana Del Rey: 'I have slept with a lot of guys in the industry'
Peaches Geldof cause of death: 'Heroin addict' socialite had taken fatal dose of drug, inquest concludes
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines MH17 crash: Was a Russian-made missile really parked in this quiet square?
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...