Meikles revenue up 15pc

HARARE - Listed hospitality and retail group Meikles Limited (Meikles) posted a 15 percent increase in revenue to $225,6 million in the six months to September 30, 2015 on the back of improved performance from its divisions.

The group’s executive chairman, John Moxon, said operating income increased by 18 percent relative to the previous period.

“While operating expenses excluding depreciation have increased by three percent, they have reduced to 20 percent of turnover from 22 percent recorded in the comparative period,” he said.

The diversified group’s boss attributed the increase in operating expenses to a growth in rentals payable to third parties as a result of growth in turnover and by a growth in utility connected expenditures.

Other costs, including employment costs, were static.

“There has been a combination of employment cost reductions in segments of the group and the creation of further employment opportunities from growth projects in the group,” Moxon said.

However, the group’s loss for the period surged to $10,8 million from $2,8 million recorded prior comparable period due to a fair value loss on disposal of available-for-sale-financial assets amounting to $3,6 million and a $4 million loss of Treasury Bills.

The Meikles boss noted that interest payable decreased by 14 percent mainly due to the reduced borrowings as interest received decreased by 41 percent, as a result of reduced interest receivable on outstanding balances due from the Reserve Bank of Zimbabwe (RBZ).

“Negotiations on further sums considered due from the Reserve Bank of Zimbabwe as disclosed in the 31 March 2015 annual report are in progress.

“It is expected that this matter will be finalised very shortly and Shareholders will be advised further at the appropriate time,” Moxon said.

He added that the group had received Treasury Bills worth $7,6 million from the RBZ while an amount of $5 million due and payable in cash as at March 31, 2015 was received in the form of TBs with a nominal value of $6,5 million on August 31, 2015.

With the exception of trade and other receivables which reflect a positive reduction for the period, other balance sheet items remained substantially unchanged in total.

Net interest payable increased by 12 percent to $3,7 million as fair value gains on biological assets reduced from $3,6 million to $660 000.

Net borrowings decreased by approximately $22 million over the six month period.

Moxon said the group’s retail unit’s turnover increased 17 percent and operating income expressed as a percentage of turnover increased from 18 percent to 19,5 percent while stock turns improved 7,1 to 08,7 times.

He also noted that the hospitality section was affected by the new value added tax, which had a material effect on revenue, coupled with the South African visa regime changes which have negatively affected tourist arrivals.

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