Brief
Mustek profit surges as gross margin narrows and cash flow collapses
Mustek's earnings rose sharply on lower finance costs and FX gains, but gross profit slipped and cash from operations plunged.
By Felo News Desk · Published
Mustek Ltd reported a 181% jump in headline earnings per share to 204.6c for the year to end‑June 2026, while its gross margin fell to 12.7% and cash generated from operations dropped more than 80%, techcentral.co.za said.
What happened
Revenue edged up 1% to R7.26 billion, and profit attributable to shareholders rose to R107.6 million from R38.8 million a year earlier. Gross profit declined 3.4% to R924.9 million, pushing the gross margin down from 13.3% to 12.7%.
What the reports add
Techcentral noted three line‑item drivers that lifted earnings: finance costs fell by a third to R101.8 million, foreign‑exchange gains jumped to R52.6 million, and Mustek’s share of associate‑company profit rose to R25.7 million, together adding R114.4 million – more than the R95.4 million increase in pre‑tax profit.
What was said
CEO Hein Engelbrecht told the board that the earnings surge stemmed “from a material reduction in finance costs and more favourable foreign exchange”, supported by cost control and better associate contributions, according to the company’s trading statement.
How it came about
Last year Mustek cut inventory by R607 million and used the cash to repay R594 million of its overdraft, lowering interest expense. In July 2026 the group refinanced its working‑capital lines with a R1.1‑billion syndicated trade‑finance facility led by Absa, replacing previous facilities and opting not to renew its overdraft.
Key facts
- Headline earnings per share rose 181% to 204.6c (techcentral.co.za)
- Gross margin slipped to 12.7% from 13.3% (techcentral.co.za)
- Cash generated from operations fell to R115.8 million from R687.4 million (techcentral.co.za)
- Finance costs fell to R101.8 million from R154.1 million (techcentral.co.za)
- Foreign‑exchange gains rose to R52.6 million from R10 million (techcentral.co.za)
Sources
- [1] techcentral.co.za — originally reported as “Mustek profit soars even as gross margin shrinks”
