Mustek makes R152 million profit in six months — benefitting from “new normal”
Mustek has reported an after-tax profit for the six months between 1 July and 31 December 2021 of R152 million.
“The Group had a strong trading performance for the six months to 31 December 2021 and is benefiting from the ‘new normal’ that includes working from home and remote learning,” Mustek stated.
“In addition, our diversified portfolio of carefully chosen products and services is providing a clear advantage in the marketplace.”
Its strong trading performance offset the losses caused by rioters burning Mustek’s KwaZulu-Natal offices to the ground in July.
Mustek reported a jump in revenue of 12.5% from R3.72 billion last year to R4.19 billion.
Headline earnings per share is 237.09 cents, up 17.3% from 202.11 cents on 31 December 2020.
The company also reported a gross profit increase to 16.2%, up from 13.9% last year, driven by increased demand and worldwide supply shortages.
“The supply shortages created strong pricing power, and we expect this situation to continue well into 2023,” Mustek stated.
The weaker rand-dollar exchange rate helped boost Mustek’s gross profit margin, but foreign currency losses offset its benefit due to the increased rand value of foreign payables.
Mustek said it incurred foreign currency losses of R56.9 million, compared to foreign currency profits of R21.1 million in the comparative period.
“It is pleasing to note that the revenue growth was across the board with the Group’s two largest segments, Mustek and Rectron, growing their revenue by 16.1% and 11.1% respectively.”
Mustek said its information technology training company, Mecer Inter-Ed, is starting to contribute meaningfully to the Group’s revenue and profitability.
Revenue of R44.0 million (31 December 2020: R21.3 million) and profit before tax of R18.3 million (31 December 2020: R2.6 million) are included in the Mustek segment.
Associates contributed a loss of R0.2 million compared to a profit of R7.8m in the comparative period.
Khauleza and Zaloserve made small losses, and the situation is not expected to improve in the short term.
Continuous Power Systems, an associate that designs and manufactures a wide range of server cabinets, and YOA, an associate that manufactures fibre-optic cable, traded profitably.
“They are well placed to grow their contribution to the Group,” Mustek stated.
Mustek noted that it has an assets all risks policy in place, covering the physical assets of the Group.
The policy includes loss of gross profit following business interruption triggered by specified perils. The business interruption section previously included a contagious disease extension limited to R10 million for Mustek and R10 million for Rectron.
Mustek’s claim of R8.7 million, excluding VAT has been paid in full during the 2021 financial year, and Rectron’s claim of R8.7 million was paid during the period to 31 December 2021.
The company also received a claim of R24 million (including VAT) from its insurers for losses to inventory and equipment caused by rioters burning down its Durban offices.
A claim of R3.8 million (including VAT) due to business interruption has been lodged with the company’s insurers. Mustek said it has not accounted for any asset relating to this claim.
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