Mustek has reported an 82% decline in headline earnings, reflecting tough economic conditions, reduced demand for green energy products and an impairment on its investment in Zaloserve.
The technology group reported headline earnings per share (HEPS) of 67.13c for the year to end-June, down 82.1% from the previous year’s 357.18c.
On September 11, the group advised that its HEPS would be 70%- 80% lower, but revised that forecast to 80%-90% lower in a Sens release early on Thursday. It then released its annual results about an hour and a half later.
The difference in the revised headline earnings was due to an adjustment on the impairment of the investment in Zaloserve (Sizwe IT Africa), which has been classified as an asset held for sale, it said in the earlier statement.
Revenue was 16% lower at R8.5bn and profit for the year fell to R21.4m from R219.6m a year ago.
Basic earnings per share (EPS) of 37.31c were down 90.1% and net asset value per share at 2,801.15c was up 2.8%.
The group declared a final dividend of 7.5c compared with 77c a year ago.
The group, valued at R760m on the JSE, is an assembler and distributor of ICT products. It was established in 1987 and listed in 1997.
The group said the operating environment was marked by tough economic conditions and cautious market sentiment leading up to the general elections in SA.
Prevailing uncertainty froze corporate and government spending and the unexpected abatement of load-shedding abruptly ended the renewable energy boom, which had fuelled the group’s growth last year.
Reduced demand for green energy products put Mustek in a challenging situation, with surplus stock in a high interest rate environment.
It said that, in conjunction with strategic partners from across the ICT industry, the group was well-positioned for the forthcoming years.
“Looking forward, we are cautiously optimistic about the future while remaining focused on optimising the balance sheet and cash flow,” it said.
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