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Finweek English Edition - - Companies & markets - MICHAEL COUL­SON

MUSTEK IS SOUTH AFRICA’S lead­ing as­sem­bler and dis­trib­u­tor of PCs, note­books and re­lated prod­ucts, its top brand be­ing Me­cer. Be­tween fi­nan­cial years 2001 and 2006 rev­enue rose from R2,1bn to R3,2bn, but head­line earn­ings of R47m at the end of that pe­riod were less than the R56m of 2001, hav­ing peaked at R113m in the year to June 2003.

In the six months to 31 De­cem­ber 2006, rev­enue of R1,57bn com­pares with R1,45bn the year be­fore. Gross profit in­creased to R286m (R224m) but higher op­er­at­ing, fi­nance and tax charges meant that head­line earn­ings fell to R44,7m (R47,9m).

Over the rolling 12 months to 31 De­cem­ber, head­line earn­ings per share were 41c, vir­tu­ally all earned in the most re­cent six months, and dis­tri­bu­tion was 55c. OP­POR­TU­NI­TIES • Use of PCs and re­lated items in SA is still grow­ing fast. • Mustek’s client base is broadly spread across the pub­lic,

cor­po­rate and per­sonal mar­kets. RISKS • Mustek hasn’t shown a pat­tern of steady earn­ings growth

and fu­ture re­sults could again be volatile. • A ven­ture in Brazil re­mains un­prof­itable, though it’s not in­tended to in­vest any more cap­i­tal there. Fluc­tu­a­tions in the value of the rand, which are un­pre­dictable, could have a se­vere ef­fect on prof­itabil­ity. • Mustek will al­ways be vul­ner­a­ble to com­pe­ti­tion from

pow­er­ful in­ter­na­tional brands. • Mustek has still to put in place a suit­able black em­power-

ment trans­ac­tion, though it’s as­sess­ing var­i­ous pro­pos­als.

MUSTEK

Source: I-Net Bridge

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