The IT slowdown has taken its toll on another company. Pinnacle Technology has been forced to sell its 50% holding in the financing company Invescor to partner in the joint venture Saambou for R4.2 million.
Invescor is a joint venture between Pinnacle and Saambou Bank providing finance for IT products and services to consumers and the corporate market. Saambou manages and administers the affairs of the company, while Pinnacle is responsible for the marketing and sales.
"With changes in the information technology arena Pinnacle believes it would be better served if Pinnacle distributes and markets information technology products and services through its own corporate structure," says management of the company.
Pinnacle experienced a 27% drop in operating profit for the interim period to December 2000.
Operating income before depreciation fell to R5.22 million in the six months, compared with R7.57 million in the same period of 1999. Revenue was flat at R156.74 million (1999: R156.17 million).
At the time of the results, Pinnacle announced to the market it was to change its focus from hardware distribution to a mix of distribution and services.
The sale of the finance business is indicative of the pressure many of the local listed IT companies have been facing to tighten up offerings, focussing only on those divisions that add significantly to their bottom line.
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