Forum Archive Index - August 2000

["David Thompson" <dvd_tpn@hotmail.com>]

For those following GDC Communications, another very compelling article in 
today's Sunday Star Times.
-----------------------------------
20 August 2000

GDC RIDING THE NEXT HI-TECH WAVE
by Garry Sheeran

Hot-shot new listing GDC Communications is climbing aboard one of the latest 
global hi-tech grwth businesses as it seeks to maintain a momentum which has 
dazzled the market in just over three months.

The Auckland-based company has developed an application service provider 
(ASP) system which is being touted overseas as the coming standard for 
delivering computer systems to businesses.

ASPs are about renting software from a company which delivers online 
services as well as technical support, upgrades and security from viruses. 
That saves businesses the cost of buying and developing their own computer 
systems, and constantly having to upgrade.

Overseas, the ASP market is poised to explode, with some analysts estimating 
it will reach the US$20 billion mark by the end of next year.

Since listing in late April, GDC has launched its own ASP system and is 
targeting the small and medium-sized business market.

GDC which issued shares at $1.50 and which closed on Friday at $4.75, 
recently announced an interim after-tax profit 28% higher at $1.34m.

Chief Executive Paul Honnor said efforts needed to get that result had 
uncovered new business opportunities, among them ASPs.

"We have 14 business units working in fve areas, but the potential with ASPs 
is huge."

In the United States, ASP developers are targeting the lucrative markets of 
big global players like Cisco Systems and Dell Computers.

But Honnor has the small and medium size businesses firmly in his sights.

"Being able to rent a computer software package is ideal for companies too 
small to have their own IT department, and too big not to."

Although providing telecommunications services for 12 years, GDC was a 
virtual unknown when it listed just over three months ago with only 5.4 
million shares issued, no public pool and little institutional interest.

But the listing, and a wider knowledge of the company's history as service 
provider for some of the telecommunication providers in New Zealand, has 
seen that situation change dramatically.

Institutional investor interest in GDC has also blossomed and the company 
now has seven institutional investors on board, the latest coming in at a 
share price of $4.85.

In its prospectus, GDC said it had a five-year history of 80% year-on-year 
growth in revenue and profits.

>From $413,000 in 1996, it had grown to $3.21m in 1999.

Its projected net profit fo the year to December 31 is $4.07m, 26% up on the 
previous year, and Honnor and analysts expect that to be reached.

The company traditionally did two thirds of its annual business in the last 
half of the year.

A major network provisioner for Telecom, and also doing extensive work for 
Telstra-Saturn in its Wellington roll-out, Honnor said growth opportunities 
were still significant for GDC.

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