WORTH LOGGING ON TO
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.