South Africa’s leading technology distributor has good and bad news for investors

Mustek’s interim results were characterised by lower revenue, but a 256% surge in headline earnings per share and significantly improved liquidity.

The substantial foreign currency gains and a material reduction in finance costs more than offset a 2.4% decline in revenue and softer gross profit margins

Mustek is one of South Africa’s only pure-play technology companies listed on the Johannesburg Stock Exchange (JSE).

It is a cornerstone of the South African ICT landscape. It evolved from an eighties PC assembly business into one of the country’s largest technology distributors.

It acts as a bridge between global technology brands and local resellers and is well-known for its homegrown Mecer brand.

However, it also distributes large global computing brands in South Africa, including Microsoft, Acer, Samsung, and Lenovo.

Since the passing of founder David Kan in 2022, the company has been led by Group CEO Hein Engelbrecht, a long-time veteran of the firm.

The company has made headlines in recent months due to the activity around Novus Holdings’ planned acquisition of Mustek.

The deal has become one of the most litigious and complex takeover battles on the JSE in recent years.

While Novus currently holds a significant majority stake, the finalization of the mandatory offer is currently paralyzed by a major regulatory dispute.

There have been numerous accusations related to the deal, including that Novus bypassed transparency rules.

Novus is also accused of using CFDs to accumulate an interest exceeding 23% without disclosing that it had crossed beneficial interest thresholds.

The Takeover Regulation Panel (TRP) further noted that Novus’s strategic controller operated out of the same Sea Point offices as the broker, Numus.

Novus CEO André van der Veen has forcefully rejected the TRP’s findings, labeling the ruling as rigged and full of factual inaccuracies.

Mustek results

On Wednesday, 25 February 2026, Mustek released its unaudited interim financial results for the period ending 31 December 2025.

Group revenue decreased by 2.4% to R3.54 billion, primarily due to declines in the distribution segment and a stronger local currency.

The gross profit margin dropped to 12.6% from 13.9% in the prior comparative period, driven by increased inventory-related provisioning.

Another concern was that revenue from maintenance and support contracts fell significantly to R12.5 million, down from R43.8 million.

Mustek’s expansion plans also did not go well. While South African operations were profitable, the East African segment reported a loss of R4.3 million.

There were also many positives, including that headline earnings per share (HEPS) increased by 256% and basic earnings per share surged 262%.

Despite a slight dip in revenue, Mustek generated R187.2 million in cash from operations, demonstrating healthy underlying cash flow.

The group recorded a R35.5 million foreign currency gain, a major turnaround from the R28.3 million loss recorded in the prior comparative period.

Mustek’s net finance costs reduced materially by 42.4% to R48.0 million, reflecting the benefits of continued working capital management and facility utilization.

The technology group ended the period with R346.9 million in cash and cash equivalents and successfully reduced its bank overdraft to zero.

Further good news was that operating expenses were cut by 4.1% to R364.9 million, reflecting successful strategic initiatives to right-size the cost base.

Mustek interim results summary