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Africa: KMAL Seeks US$8m for Recapitalisation
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 Published by the government of Zimbabwe |
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The Herald (Harare)
28 March 2008
Posted to the web 28 March 2008
Harare
Kingdom Meikles Africa Limited will issue 5,9 million shares on its London Stock Exchange share register as it seeks to raise US$8 million to recapitalise its retail operations.
Chief executive Mr Nigel Chanakira said the shares, which had remained unissued since 1996 were likely to be taken up through a private placement at around US$1,30 a share. He added, "there was a strong appetite for the shares."
Group finance director Mr Bryan Thorn, said the move to raise capital was on the back of increased local borrowings while margins remained depressed. Local borrowings as at March were $50 trillion against $2,4 trillion at the December year-end. Retail director Mr Dave Mills said, "the question for the group was how to apply the recapitalisation". Either into merchandise that could provide the right margins or into upgrading the facilities so the resources would be able to counter the expected increase in competition when international capital returned.
On group performance for the last financial year, Mr Thorn said the financials published in the press carried the results for Meikles Africa for the 9 months to December, the new financial year-end. Retail profits made up 37 percent of total group revenue of $43,1 trillion in the 9 months to December against $357 billion in the 12 months to March.
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Kingdom Financial Holdings accounted for 21 percent of revenues and 64 percent of operating profit of $11,9 trillion KFHL chief executive Mr Onias Makamba said "liquidity problems in January were well documented and the bank had broken even in the month". The banking group had however passed last year's bottomline of $20,81 trillion after the end of the cash crisis in February "as a result of Aspef funds coming into the market". "March had continued on that trend", Mr Makamba said.
Hotels accounted for 20 percent of revenue and 39 percent to operating profit. Occupancies for January were the same as December but because of the elections Meikles Hotel was on 90 percent a figure last achieved in 1998. Victoria Falls Hotel was also at the same levels and the Cape Grace was over 90 percent. Over the reporting period occupancies had grown 28 percent with Victoria Falls up 35 percent, Meikles 28 percent ahead and the Cape Grace rising 11 percent. Mr Thorn said that local revenue per room was "lower in real terms as rates did not keep up with inflation and the exchange rate". The group would continue dialogue with the NIPC.
Mr Mills said the group was compliant on NIPC pricing "but some supplier of goods might not be", following the latest threat to reduce prices.
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