ICT distributor Mustek on Monday reported a 10% rise in revenue from continuing operations for the six months ended December 2015, to R2.468 billion.<\/p>\n
Mustek’s headline earnings declined 3.0% to 51.67 cents per share, and basic earnings
\nfell 3.3% lower to 51.31 cents per share.<\/p>\n
Profit from operations advanced to R108 million, from R96.9 million in the prior reporting period.<\/p>\n
The gross profit percentage was marginally down from 14.5%, to 14.4%, but well up from the 13.2% reported for the year ending 30 June 2015, Mustek said.<\/p>\n
Distribution, administrative and other operating expenses increased by 9.1% and represents 9.8% of revenue.<\/p>\n
The group said its more conservative forex hedging policy is working well considering the sharp depreciation of the Rand in the period from 30 June 2015 to 31 December 2015.<\/p>\n
“The weaker ZAR\/USD exchange rate impacted the Rand value of our inventory and management is committed to reduce the inventory days in the period to June 2016,” it said.<\/p>\n
The contribution from our associates increased mainly as a result of the good performance of Sizwe Africa IT Group. “Sizwe is well positioned to grow from this base over the next three to five years after concluding various long-term contracts,” Mustek said.<\/p>\n
Net finance costs increased from R23.1 million to R40.1 million due to high inventory levels at both Mustek and Rectron.<\/p>\n
The weaker ZAR\/USD exchange rate resulted in higher inventory values and an increase in bank overdrafts. The excess inventory will be largely disposed by the end of March 2016, Mustek said.<\/p>\n
It noted that the transition to cloud-based services has led to the group diversifying away from just being a distributor of traditional IT hardware.<\/p>\n
“With our appointment as a Microsoft volume licence distributor, we now have the ability to market and distribute a full range of cloud services to our resellers.”<\/p>\n
More on Mustek<\/p>\n
Mustek grows interim revenue by 25%<\/a><\/strong><\/p>\n Mustek reports 13% revenue growth<\/strong><\/a><\/p>\n