JSE-listed Mustek says its wholly-owned Rectron subsidiary has regained its historical profitability levels, and is “positioned to deliver on its continued recovery”.
Mustek this morning released its interim results for the six months to December and said revenue from continuing operations gained 10%, to R1.8 billion, and headline earnings per share grew 137%, to 29.52c.
Revenue growth was supported mainly by the addition of the Acer and Lenovo product ranges, says Mustek. It expanded its basket of products with the introduction of multiple additions to the product portfolio offering, including Huawei Enterprise Solutions and the Miniflex range of fibre cables, as well as solar panels.
“We are strongly encouraged by this set of half-year results, which shows that our strategy of expanding our basket of products and leveraging key industry partnerships, with a defined focus on specific vertical industries, is proving successful,” says CEO David Kan.
Despite the significant depreciation in the external value of the rand during the period, foreign currency losses reduced significantly as Mustek implemented an active hedging programme.
In its results commentary, Mustek says it is “focusing on increasing volumes as it remains a driver of performance across our operations”. It notes that “significant growth opportunities lie in the education, health and security industries, as well as the solar energy space”.
Mustek adds that tablet brands other than Apple, which it says is slowly losing its dominance, are likely to be a positive revenue driver over the next few years as “sceptics” argue that the PC will be replaced with newer, more mobile, offerings. “We believe that Mustek will become a key player in the local tablet market for the other brands.”
The group notes that the transition in the CEO leadership with the appointment of Lindi Shortt at subsidiary Rectron “proceeds apace”. The unit grew revenue 36% from continuing operations to R827.7 million, which excludes the held-for-sale Australian unit, and regained its profitable position with a bottom line gain of R14.3 million, almost double last year’s figure.
Mustek has also agreed to sell its share in Comztek to JSE-listed Datatec in a bid to reduce debt and dispose of non-core units. The deal has yet to be concluded.
Mustek has also launched a cloud offering for the channel that includes a micro-billing system to support the transition from a transactional sale to an annuity model, and experienced another year of strengthening its strategic partner network within the industry.
