Zimbabwe: Meikles Limited Registers Sale Declines Across All Segments

24 February 2020

MEIKLES Limited says it recorded sale declines across its hospitality, agriculture and supermarket segments in both the last trading quarter and nine-month period ending December 31 2019.

Presenting a trading update recently, the group's company secretary, Thabani Mpofu said all segment performances were lower than those recorded in the prior year.

"The supermarket sale volumes retreated by 28 % and 24 % for the quarter and nine months respectively compared to the same period last year. The stores are reasonably stocked despite challenges in supply chain arising from shortages of foreign currency," he said.

In the agriculture segment, Mpofu said bulk tea production declined by 20% and 23% for the quarter and nine months respectively due to intermittent electricity supply that reduced both irrigation and factory operating hours.

As a result, works on the construction of the first solar power plant commenced during the quarter under review to mitigate the power outages.

Bulk tea export sales of 1,514 tonnes for the quarter were 53 tonnes below the quantities sold during the same period last year.

For the nine months, bulk tea export sales were 5,183 tonnes compared to 5,206 tonnes in the comparative period of last year.

During the period under review, volume of tea and coffee sales to the domestic and regional markets reduced by 21% and 20% for the quarter and nine months respectively.

Despite the declines, the volume of macadamia and avocado export sales for nine months grew by 126% and 39% respectively compared to the same period last year resulting in the incremental export sales from these new crops compensating for the reduction in tea sales.

In the hospitality segment, room occupancy retreated by 9.32 and 6.18 % points for the quarter and nine months respectively against the comparative period for the operation in Victoria Falls.

In Harare, room occupancy declined by 5 % and 7 % for the quarter and nine months respectively compared to the same period last year.

"In inflation adjusted terms, revenue from continuing operations increased by 23% and 14% (475% and 335% - historical cost terms) for the quarter and nine months respectively. The increase in revenue is ahead of the percentage increase in operating costs for the nine months and as a result, profit growth is above revenue growth," Mpofu said.

Speaking on the hotel sale, he said all the conditions precedent as well as regulatory approvals required to consummate the transaction have been met.

"The company and the buyer are implementing the terms of sale and purchase agreements necessary to bring about the effective date of the transaction," he added.

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