The Anglo File: Investors Find Symbian's No News, Good News

LONDON -- Shares in palm-top maker Psion got a boost Tuesday from apparently solid first-half figures and confirmation that its mobile-phone venture Symbian will be floated, subject to market conditions. On closer examination, the news about Symbian is not all that new and the results are not quite as good.

Despite today's announcement, Psion is not actually bringing forward the flotation of Symbian, a venture with Motorola (MOT Quote), Ericsson (ERICY Quote), Nokia (NOK Quote) and Matsushita (MC Quote) that designs mobile phones based on Psion's EPOC operating system. Instead, the company was merely saying that a flotation is the preferred option.

Nevertheless, Psion's shares rose 14 pence, or 2.1%, to 679 ($10.19). Nokia and Ericsson were also trading strongly in Europe. Midsession, Nokia was up 1.81 euros, or 4.3%, at 43.65 ($39.29), while Ericsson was up 1.50 kronar to 170.00 ($18.48)

In a statement this morning, the company said: "Symbian shareholders have decided to float Symbian -- subject to good progress in the establishment of volume products and to prevailing conditions in financial markets."

Up until now, Psion has consistently said it was looking at floating the unit but that was not thought likely until Symbian started to pull in significant revenue. Since Symbian is not expected to break even until the end of 2001 and won't be profitable until the year after that, the flotation is unlikely to happen in the near term.

Indeed, Psion's Chief Executive David Levin admitted this morning that Symbian had not even appointed a banker to the float. If Levin is being truthful here, then it would prove false a June report in The Sunday Telegraph that said Symbian had picked Credit Suisse First Boston to underwrite the deal.

"What we've been saying to date is that flotation is one of the options open to us. Now we're saying it's the preferred option," Levin explained. "As far as the timing goes, it remains the same. We're not in the business of floating this company until it's ready in terms of the markets for its products having been established."

Analysts have guessed that Symbian could be worth anywhere from 1-10 billion. At the midpoint of that range, 5 billion, Psion's 28% stake in the venture would be worth 1.4 billion.

Psion's earnings results announced this morning also appear impressive, but that is only because the comparative period -- the first half of 1999 -- was actually very weak.

"Although I'm delighted with those figures, some of the comparison is flattery in as much as we had a weak first half last year," Levin conceded.

In the six months to June 30, Psion's pretax profit was 3 million, up from a profit of 57,000 last time. The pretax profit before Symbian costs was 7.7 million up from 2.8 million. The figures also show that the strength of sterling against the euro knocked 4.4 million off profits. Revenue for the half-year was 94.3 million, an improvement on the 64.2 million turnover in the same period last year.