18 May 2017

Zimbabwe: Meikles, Govt Reach Agreement Over RBZ Debt

Meikles Limited is set for an improved performance after reaching an agreement with Government over the Reserve Bank of Zimbabwe (RBZ) debt issue which has been outstanding for two decades.

Mr Moxon told the company's annual general meeting yesterday that a resolution to the long standing dispute over the debt recorded during the Zimbabwe dollar-era had since been agreed to by both the Government and the group.

"An agreement with Government has been reached following high level meetings between its representatives, the RBZ and ourselves

"The final figures now await the signature of the Minister of Finance and Economic Development and the information will be made public thereafter," he explained in a statement to media.

The closure of the debt issue will also see the group finally release its delayed financial results. Mr Moxon said the financials would be released in a fortnight and would fully reflect the position taken on the debt.

"We had to delay publishing our previous results due to the outstanding Government debt issue. Now that it has been resolved, we will be in a position to advance the restructuring and repositioning of the group.

"We will also use some of the funds to ensure that the stores segment acquires appropriate inventory," he said adding that net borrowings in the expected results will also show a significant reduction.

On the company's performance, Mr Moxon said EBITDA for the year doubled while profit after tax remains better than the previous comparative year. Mr Moxon said TM/Pick n Pay performance has been extremely encouraging especially on the bottom line.

"As part of our strategy to remain relevant in the market, we have also been trying to operate at competitive market prices. We constantly make market comparisons and from those surveys, our prices remain the most competitive.

"We are also confident that while our competition is losing money, the TM/Pick n Pay chain is on an upward trajectory," he said.

Mr Moxon said Tanganda also had an extremely good year driven by good rains and an increase in prices and sales recorded during the period.

"The prices of Tanganda products managed to grow during the year especially for macadamia, tea and coffee. We have had an increase in performance for Tanganda because new crops have now reached maturity and now contributing," said Mr Moxon adding that the group recorded its largest EBITDA in history.

On the hospitality segment, he mentioned that Victoria Falls hotel also had a good year after completing the first phase of refurbishment. Phase two is set to commence soon.

Mr Moxon stated that Meikles Hotel has been encouraging but convincing performances will only start once there is an improvement in the economy.

"At present, the group charges three star prices for a five-star facility and that's entirely due to the prevailing economic conditions," he said.

He said the stores, which include Meikles Mega Market and the department stores, had a good year but the SBU had been greatly affected by low stocking levels which will however, be corrected once the proceeds from Government kick in.

Meikles is currently trading under caution relating to an offer made by United Arab Emirates investor Albwardy Investments Limited to buy out the group's shareholders.

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