Zimbabwe: Meikles in Sound Performance

One of the leading retail and hotel groups in Zimbabwe, Meikles Limited, posted financial positives across segments for the year ended March 31, 2019.

Profit for the year went up to $66 million compared to a measly $8,2 million in 2018. This is after revenue grew to $791,6 million up from $524,9 million in 2018 comparative.

Costs, however, grew at a slower pace to $703,4 million from $497,6 million prior year resulting in a much improved profits.

Group earnings before interest, taxation, depreciation and amortisation (EBITDA) went up from $40,6 million in 2018 to $101,5 million in the year to March 31, 2019.

Supermarkets segment (trading as TM Pick n Pay) recorded growth in revenue, profit and EBITDA on the back of an increase in units sold and inflation induced price increases.

Revenue went up 53,2 percent while EBITDA also followed the upward trend from $34,5 million in 2018 to $69 million.

The Agricultural segment under Tanganda also contributed much to the positive financials on the back of firm international bulk tea prices up to October 2018.

New crops like macadamia nuts, avocados and coffee; effective counter on Cyclone Idai damage on Macadamia nuts through silviculture and also on the back of an investment in a new world-class IMA tagless tea-bagging machine that boosted volumes.

Going forward the Group expect to record strong performance as a result of favourable exchange rates.

The Exchange Control Directive RU 28 of 2019 and the subsequent introduction of the interbank market for trading the RTGS $ against other currencies has ushered in favourable exchange rates that will impact positively on the Group's export segments.

With the development, Meikles is positioned to reduce debt burdens and realise gains from envisaged investment funds as well as from the purported disposal of Meikles Hotel.

The decision to dispose of Meikles Hotel emanates from the Group considering itself off the position to commit an initial forecast of US$30 million to upgrade it to a 5-star property by international standards.

"Post year end, the exchange rate between the RTGS$ and US$ moved significantly impacting favourably on the Group's exporting segments. Consequentially, the Group now has the ability to eliminate all short-term borrowings and creditors in arrears from operating cash flows.

In this regard, shareholders should also consider sums to be realised from the sale of Meikles Hotel, and the additional planned funding initiatives," said the Group Executive Chairman Mr Jonh Moxon in a statement accompanying the trading results.

Outlook is further expected to be positive with the said investment funds as well as job evaluation and enhancement at board level;

"The Group will benefit from the provision of both local and international investment funds for the use of Group expansion and financial security.

"The board recognises that additional skills at board level in the Holding Company and at board level in Group companies will be required to ensure the Group responds to challenges and meets the stringent requirements that will emanate from the investment funding," said Mr Moxon.

Meanwhile the Group has secured funds for the Victoria Falls Hotel refurbishment set for commencement during the last quarter of 2019 fiscal year.

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