Xantium to be first new listing on AltX

IT company Xantium Technology Holdings, chaired by former North-West premier Popo Molefe, is set to be the landmark 'front door' listing on Alt^X on Friday this week. The abridged prospectus released today details the intended placement of 10 million shares at 50 cents each, totalling R5 million, to bolster the R9,6 million capital already raised through previous private placements of shares.

Trading since October last year, Xantium is headed by IT veteran James Murray who previously successfully took public TCO Holdings, subsequently bought by Didata.

The abridged prospectus forecasts revenue for Xantium of R174,5 million for the first full-year of trading to May 2005 with revenue growth forecast to R205,4 million for the 2006 financial year. HEPS is forecast to be 7,3 cents in May 2005, increasing to 8,8 cents in May 2006.

Murray is confident about Xantium's prospects, pointing out that the negative perception clouding the IT industry in recent years has begun to lift. "The IT industry is definitely in the early stages of revival after the post-Y2K lull," says Murray.

"The cycle has begun again with companies now looking to upgrade their pre-Y2K systems in order to maintain efficient operations and secure a competitive edge." He says that empowered IT companies are best placed to capitalise on this opportunity in South Africa especially in light of industry transformation charters.

"We've integrated an achievable BEE strategy with our business strategy from the start and getting BEE right at the outset is a differentiator for Xantium," he says.

Noah Greenhill, manager of Alt^X, is supportive of the new listing. "Xantium has an excellent management team with a thorough understanding of listing requirements and the fact that they have BEE in place already augurs well for continued investor confidence."

Murray says that strong partnerships are another key to success in the industry. He points out that not only is Xantium backed by heavyweights including Microsoft, HP, Veritas and Tarsus, the group has also innovated partnerships not yet in place in the local industry for instance with Hansen, the leading global supplier of niche software aimed at government.

"Xantium is strong operationally too, with our divisions offering ingenuity and flexibility to meet the demand for IT solutions that offer a measurable benefit to clients," he says.

The successful placements of shares to date underpin Greenhill's and Murray's confidence in the company's listing. "The appetite for our shares indicates shareholders' acknowledgement that Xantium's fundamentals are securely in place and they are encouraged by our performance since October last year," says Murray.

He is particularly excited about the Alt^X market. "Alt^X is concentrated on small-cap ventures with growth potential. This will enable Xantium to establish a significant profile in the investment community and build a liquid share without being overshadowed by larger-cap, more established stocks."

Alt^X currently has five listings, all of which have been transfers from the main, venture capital and development capital boards of the JSE. It is the first alternative exchange in Africa that is focused on listing small and medium growing companies.