Bucking the recessionary trend, leading local IT distributor Mustek today announced year end financials showing a 16% increase in revenue to R4,072-billion, up from R3,503-billion for the corresponding period last year.
Cash from operations was up 226% to R145,5-million (R44,6-million last year); dividends per share have risen 18% to 20 cents (17 cents in 2012); and net asset value per share is up 9% to 762 cents from 697 cents.
In a SENS statement today, the company adds that its gross profit percentage decreased from 14,3% to 13,6%.
“The addition of Acer and Lenovo to our product range over the past 12 months assisted the revenue growth, but negatively impacted margins as these products are typically sold at lower margins.”
It adds, though, that it has expanded its product portfolio with the addition of Huawei Enterprise Solutions, the Miniflex range of fibre cables and solar panels.
Foreign exchange fluctuations were again a thorn in the company’s side.
“At 30 June 2012 the Rand traded at R8,19 against the USD and weakened to R9,96 at 30 June 2013,” Mustek says.
“This represents a 21,6% devaluation and as an importer, Mustek will incur forex losses when the Rand weakens against the USD. During the year Mustek changed its policy to cover two thirds of its USD exposure and as a result, managed to contain the forex losses to R50,5-million (2012: R47,8-million).
“As a result, Mustek’s headline earnings from continuing and discontinued operations is 3,9% higher at 72,85 cents per share (2012: 70,15 cents per share) and basic earnings is 6,5% higher at 78,43 cents per share (2012: 73,67 cents per share).”
The statement goes on to say: “Other gains (losses) of R12-million (2012: R5,6-million loss) consists of a pre tax profit of R15,4-million on the sale of Comztek and a R3,4-million impairment of distribution rights. The previous year’s loss consists of a R2,2-million impairment of an associate loan and a R3,4-million impairment of distribution rights.
“The improved contribution from our associates arose from higher levels of activity and continued growth. Focus on optimal working capital management continues and inventory days reduced to 71,5 days (2012: 81,8 days).
“During the year, the Group applied hedge accounting and separated the interest and spot elements of their forward contracts, resulting in R8,2-million being classified as finance costs as opposed to forex losses.”
Mustek also expressed its satisfaction with the performance of group company Rectron.
“The transition in the CEO leadership with the appointment of Lindi Shortt at subsidiary Rectron proceeds apace, with increased revenues of 25% from continuing operations. Rectron has also regained the historical profitability levels previously earned, and is positioned to deliver on its continued recovery.”