Johannesburg, 03 Mar 2006
JSE-listed computer manufacturer Mustek is paying its shareholders an interim dividend of 35c a share, up from a previous interim dividend of 30c.
The dividend is to be paid on 27 March to shareholders recorded in the company`s books at the close of business on 24 March.
The group announced the dividend last night as it released its results for the six months to end-December, showing a 6.8% increase in attributable profit to R47.89 million, from R44.84 million for the same period a year earlier.
Revenue rose 15.5% from R1.35 billion to R1.55 billion, which CEO David Kan says was helped by the exchange rate, a 10% increase in unit sales of Mecer PCs, a bigger contribution from international operations and the proportionate consolidation of Comztek for the full period.
However, the international operations trade at considerably lower margins than the local operations, resulting in downward pressure on the group`s margins overall. Mecer Brazil recorded a R4.9 million loss and Mustek`s share of Rectron UK`s losses was R2.2 million.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by just 1% from R91.27 million to R92.17 million, representing a decrease in the EBITDA margin from 6.8% to 5.9%.
The operating margin slipped from 6.2% to 5.2%, with operating profit slipping 1.9% from R82.82 million to R81.2 million.
Replacement cycle
The group`s pre-tax profit was 14.9% down at R65.95 million from R77.46 million previously, but a lower income expense helped the bottom line, with the profit for the year rising from R53.11 million to R55.16 million, reflecting a margin of 3.5% against 3.9% previously.
Headline earnings rose 8.9% from 41.59c a share to 45.28c a share, while basic earnings per share were 3.4% up at 45.28c compared against 43.78c previously.
The balance sheet shows a decrease in long-term borrowings from R239.42 million to R68.17 million, with an increase in short-term borrowings from R23.99 million to R241.23 million.
"The movement between long-term and short-term borrowings is due to the securitisation structures that are maturing during the next 12 months," says Kan. "Both Mustek and Rectron are currently renegotiating with funders to extend the funding for a further five-year period."
He says the Y2K replacement cycle is under way, but sales have not yet reached expected levels. Kan expects changes in technology, such as the introduction of Microsoft`s Vista operating system, as well as broadband roll-out, to lead to a "new wave" of hardware replacement beginning next year.
The group also expects to benefit from government initiatives to bridge the digital divide and also from various initiatives to improve computer literacy. Mustek also expects to benefit from school initiatives.
The Mustek share was trading at R10.60 on the JSE at 10.03am today. This was 10c or 0.9% down on yesterday`s close at R10.70.
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