ICT solutions distributor, Mustek's group revenue has increased by 8.2% to R5.67 billion from R5.24 billion in 2017.
The JSE-listed company announced its audited summarised consolidated financial results for the year ended 30 June 2018 this morning.
Mustek attributes the growth in revenue to new products and services added to the group's portfolio over the last five years.
The main business of Mustek, its subsidiaries, joint ventures and associates is the assembling, marketing and distribution of ICT products and services.
The distributor's gross profit percentage increased to 14% (2017: 12.6%) predominantly due to reduced sales to mass retailers and a reduction in aged stock that sells at lower margins.
It says the rand depreciated by 16.7% or R1.96 against the dollar during the last quarter of the financial year and this sudden movement negatively impacted the results and unrealised forex losses of R42.7 million (2017: R3.5 million) were recorded and included as part of foreign currency losses.
However, it points out that a substantial portion of this loss will be recovered through a combination of higher selling prices and forward exchange contracts entered into after year-end at amounts lower than the 30 June 2018 closing rate of R13.71.
Mustek says distribution, administrative and other operating expenses increased by 11.7%. Share appreciation rights are revalued at each reporting period and a share-based payment expense of R6.7 million (2017: R1.4 million income) was included in distribution, administrative and other operating expenses.
It notes that net finance charges decreased from R87.3 million to R76.6 million and the reduction in inventory and accounts receivable levels contributed to this saving. Working capital management continues to be a driver of profitability and is currently receiving management's full attention.
An improved performance from Sizwe Africa IT Group and a reduced loss from Yangtze Optics Africa (YOA) saw the contribution from associates increase. Management believes that YOA will be profitable in the 2019 financial year after securing and starting to supply a leading fibre company towards the end of the financial year.
Mustek's headline earnings per share is 28.2% higher at 104.15 cents (2017: 81.26 cents) and basic earnings per share is 27.7% higher at 102.58 cents (2017: 80.32 cents).
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