Prism is latest victim of Asian debt

By Staff Reporter for Prism Holdings Limited
Johannesburg, 29 May 2002

JSE-listed secure electronics company Prism has issued a profit warning for its year-end results after running into debt collection problems in its South East Asian operations.

Prism had indicated in its interim results that the debts in question would be collected in the next six months and therefore be reflected in the figures for the full year.

However, the Johannesburg-based company has warned investors that this may not be the case, and will make a R43 million provision for the full debt in its June year-end results.

The announcement follows shortly after fellow listed company Dimension Data was caught unawares by bad debts arising in its Asian operation, Datacraft Asia.

Dimension Data had to make a $15 million provision for bad debt, and when DiData`s results were released this month, Datacraft chairman Patrick Quarmby said the Asian region is a risky one in which to operate.

In addition to the debt, Prism`s board announced that certain orders expected in the current reported period would only bear fruit in the following financial year and as a result, the company says it may report a headline loss for the 2002 financial year.

Prism has dealt with a rights issue to raise capital, staff layoffs and a reconstituted board in the current reporting period.

The Prism share price recovered after its 62c opening to trade at 66c by noon today. The share gained steadily over the past seven days, and despite the market`s reaction to the warning, the share is trading at the same price as it was five days ago.