SOUTH AFRICAN MUSTEK DIVIDEND UP DESPITE LOSSES

Mergers, Acquisitions and Financial Results

Computer company Mustek has declared a healthy interim dividend of 35c a share, up from 30c last year, even though its foreign operations curtailed any increase in its operating profit.

Mecer has opened a branch in Brazil in an effort to take SA's best-selling PC brand into the huge South American markets.

So far the venture has been unprofitable, with the Brazilian branch losing R4,9m in the six months to December 31.

Mustek's operations in the UK saw a loss of R2,2m, with CEO David Kan saying corrective measures had been taken to boost the performance.

Those foreign operations trade at lower margins than the local operations, whittling down Mustek's profit margin.

Those were the only blots on the figures, which showed a 10% increase in the number of Mecer PCs sold.

Revenue of R1,5bn was up 15% from R1,3bn due to the increased sales, a higher exchange rate and the growing contribution from abroad.

A lower tax bill helped push up the net profit from R53m to R55m, with headline earnings a share of 45,28c up from 41,59c.

The company is sitting on cash of R228m despite paying a total of 60c a share in dividends in the past year.

Business Day