Johannesburg, 12 Mar 2001
Mustek has reported a 9.74% decrease in headline earnings per share for its interim period, partly as a result of certain "underperforming subsidiaries" and exceptional sales prior to Y2K.
The IT-focused investment holding company also blames the fall in headline earnings to 41.23c per share for the six months to 31 December 2000 from 45.68c a year earlier, to finance costs on the investment portfolio and an effective increase in the tax rate.
Revenue increased to R973.46 million (1999: R720.96 million) after consolidating the results of Rectron, in which Mustek now has a 51.8% shareholding.
Cost of sales amounted to R821.95 million (R605.48 million), resulting in a gross profit of R151.51 million (R115.48 million).
Profit from operations increased to R62.15 million (R54.57 million).
CEO David Kan says gross and operating margins were lower due to tough trading conditions with lower volumes experienced by the IT industry generally.
After-tax profit fell to R33.26 million (R44.02 million). The group`s net asset value fell to 335.02c (347.12c per share) at the end of the period.
Kan says Rectron`s results show a consistent trend of increasing growth in revenue and profit. Rectron`s after-tax profit of R12 million is 20% higher than the same period the previous year.
Mustek`s gearing is receiving the board`s attention and has shown substantial improvement, he adds.
"The debt equity ratio, excluding Rectron and before application of the new accounting policy for [amortising] goodwill, equals approximately 36% from 43% at year-end."
Commenting on future prospects, Kan says there is no replacement for the PC in the immediate future.
"PCs cannot be matched for functionality and performance by personal digital assistants, thin client architectures or other single-task devices," he says. "The Mecer brand is gaining wider acceptance in the corporate and government sectors, where we are fulfilling major contracts won.
"Our market share in SA has grown from 17% in Q3 to 19% in Q4, and we expect 20% for 2000, with a long-term target of 30% for 2002."
The company expects the revenue and profit ratio for this financial year to revert to 40/60 between the first and second months.
The Mustek share was unchanged at 110c on the JSE this morning.
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