Johannesburg, 05 Jun 2000
Mustek, the JSE-listed supplier of Mecer computers, has attributed slow third quarter financial results to the deferral of a government contract, but says it will show full-year growth.
Earnings per share of 9.2c have been reported for the third quarter, compared to 36.5c for the same period in 1999.
Mustek attributes the disparity to the government extending its supply contract to the end of May, resulting in a deferral of new equipment purchases.
Mike Hennessy, Mustek executive director, says this should not in any way be seen as lost business, merely a deferral of business which will contribute to the next financial year`s results rather than to the current year.
According to Mustek, the abnormally strong public sector sales in the 1999 third quarter gave an imbalanced reflection to the results. The company says the new government contract will only come into effect in July 2000.
"Because of the feverish spend in the third quarter last year we have not shown the same amount of growth. We are still confident that we will show earnings growth this year, but not as large as if the government contracts had come through," says Hennessy.
Mustek closes books for the year on 30 June.
Results for the nine months to 31 March show earnings at 54.4c per share. Interim results to December saw earnings at 45.2c per share on a turnover of R721 million, although operating margins were down from 8.8% to 8.1% for the six-month period.
"Turnover for the third quarter has been lower, but I think it has been a quiet month in the industry as a whole. Mecer has grown its market share to over 20% and the operating margins on this division are still very good," explains Hennessy.
Mustek is involved in a legal wrangle with Siltek distribution company MMW, which is suing Mustek for alleged infringement of a restraint of trade agreement between the companies.
Hennessy says Mustek attorneys are examining the documentation and the board is waiting for legal directive before commenting.
Markets reacted favourably to Mustek`s latest figures, with the share trading up on the 422c opening at 435c.
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