Mustek Blames Economy For Hefty Earnings Decline

Heps for the half-year ended 31 December 2024 was 23.47c, down from the 91.34c reported in the 2023 financial year. Revenue also slid, down 14.1 year on year to R3.7-billion. Operating profit fell by 47.1, although gross profit rose by 13.8 as the result of a "more favourable product mix".

"The group's performance remained under pressure, reflecting the ongoing challenges posed by global and local economic conditions," Mustek said in notes included with its interim results.

"These included persistent inflation, elevated interest rates, sluggish economic growth, and fluctuating consumer and investor confidence, both in South Africa and internationally."

Mustek blamed the decline in revenue on "economic constraints, lower consumer demand and being selective in only pursuing deals that align with our risk appetite and profitability targets".

"The group's two largest segments, Mustek and Rectron, saw their revenues decline by 9.1 and 26, respectively. The group's IT training company, Mecer Inter-Ed, experienced a slight decline in revenue to R43.4-million from R46.2-million from tougher market conditions, although the margin achieved was better than the comparative period," it said.