Mustek, local assembler of information communication technology (ICT) and home computers, lifted headline earnings a share by a whopping 247.5 percent to 441.81 cents and the dividend by 246 percent to 90c after the group benefited from remote working and learning trends. Photo: Simphiwe Mbokazi
Mustek, local assembler of information communication technology (ICT) and home computers, lifted headline earnings a share by a whopping 247.5 percent to 441.81 cents and the dividend by 246 percent to 90c after the group benefited from remote working and learning trends. Photo: Simphiwe Mbokazi

Mustek earnings are benefiting from remote learning and working

By Edward West Time of article published Sep 10, 2021

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MUSTEK, local assembler of information communication technology (ICT) and home computers, lifted headline earnings a share by a whopping 247.5 percent to 441.81 cents and the dividend by 246 percent to 90c after the group benefited from remote working and learning trends.

The share price leapt 3.38 percent to R13.75 by yesterday afternoon, bringing the gain in the price over a year to 96 percent.

“We are confident the working and learning from home reality is more than a passing trend. Employees had a glimpse of what their workplaces can be, and most will demand this type of flexibility from their employers in future,” the group said.

Revenue increased 25.6 percent to R8.04 billion and gross profit was up 14.8 percent. Operating profit increased 135.1 percent to R472.46 million.

Profit came to R296.43m versus R88.05m in 2020. Net asset value was up 28 percent to 2 046.07c per share.

“Our diversified portfolio of products and services provided a clear advantage in the marketplace.

“Revenue continued the growth trajectory that started during the previous financial year due to surging demand sparked by remote working requirements and remote learning,” the group said.

Group revenue increased by 25.6 percent to R8.04bn. Revenue growth was across the board with the group’s two largest segments, Mustek and Rectron, growing revenue by 22.6 percent and 30 percent respectively.

Rectron saw a surge in demand for its products. The addition of HP Printers, Zebra and DJI Enterprise to its product range towards the end of the 2020 financial year assisted growth.

The gross profit percentage increased to 14.8 percent from 14.2 percent in 2020, mainly from increased demand for the group’s products and worldwide supply shortages.

The exchange rate strengthened and R10.5m of foreign currency profit was earned compared to foreign currency losses of R56.8m in the comparative period.

Distribution, administrative and other expenses increased 18.4 percent, mainly due to an increase in commissions and incentive bonuses, due to the over performance by the group.

Net finance charges fell to R70.2m from R100.9m, mainly due to lower interest rates.

The contribution from associates decreased from R17.5m to R5.3m.

The contribution from Sizwe Africa IT Group was negatively affected by a loss on the sale of an investment in a subsidiary and the impairment of property, plant and equipment.

The group owns 25.1 percent of YOA, an associate investment that manufactures fibre optic cable. YOA contributed R11.6m towards associate income.

Mustek said it was well placed in an industry benefiting from the “new normal” that includes working from home and remote learning across basic education and higher education sectors.

Investments in new product lines such as networking equipment, sustainable energy and fibre were starting to contribute meaningfully to revenue and profit.

The growth in fibre to the home was not only assisting fibre sales, but also increasing the demand for new devices to fully benefit from the faster internet speeds.

“The increased device market size will drive the demand for new infrastructure in order to support these devices and will accelerate the growth of the ICT industry over the short and medium term.”

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