Business

Postcards from the edge

Prism Holdings has taken some strong medicine to rehabilitate itself after the excesses of the boom times. The group is the latest in a long list of local IT companies to discover that acquisitions are often far more expensive than their initial price tags.

28 October 2002

Prism Holdings had no shortage of reasons to offer shareholders for its shaky performance in the last financial year: from deferred revenues, high financing costs and tight margins through to bad debts and tough market conditions. But at the top of its litany of woes is a hangover from a two-year buying binge that saw the group acquire more companies than it could comfortably integrate and that were not necessarily a good fit with its operations.

But signs warning of trouble have been there for all to see, practically since the group launched itself onto the JSE Securities Exchange in October 1999. Prism listed at a time when investors were still receptive to exciting new listings but the cracks in the technology market were already starting to show.

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