Meikles back in the black

HARARE - Zimbabwe Stock Exchange-listed conglomerate, Meikles Limited (Meikles), has bounced back to profitability after registering a $3,2 million profit in the half year to September 2017 compared to a loss of $1,4 million in the same period last year.

The group’s executive chairperson, John Moxon, on Friday said the company’s revenue for the six-month period grew by 12 percent to $254 million from $225,9 million in the previous year.

John Moxon

John Moxon - Meikles Limited Group Executive Chairperson

“Earnings before interest, tax, depreciation and amortisation (Ebitda) for the period grew by $5,7 million or 60 percent from $9,5 million in the previous year to $15,3 million,” he said. 

In the period under review, Meikles supermarket chain, TM Pick n Pay saw its revenues surging by 15 percent to $232 from $202 million in the previous year.

The growth in revenue included a substantial increase in the number of units sold, Moxon said.

“Ebitda for the period grew by 38 percent to $13,2 million. Profit before tax was at $9,1 million, a 49 percent growth from $6,1 million in the previous year.

“Refurbishment works are in progress at a number of branches with completion expected before the commencement of the festive season. Additional branches are soon to be opened and others are under consideration in terms of forward planning,” he said.

Tanganda, an agricultural arm of Meikles, saw its revenue increasing by 26 percent to $12,9 million from $10,2 million achieved during the six months ended September 30, 2016 due to an increase in international bulk tea prices to an average $1,65/kg compared to $1,51/kg a year ago.

Moxon noted that bulk tea production of 3 077 tonnes was 37 percent higher than 2 251 tonnes produced in the comparative prior year period.

“The average price on avocados of $1,62/kg was 80 percent higher than the previous season’s average price of $0,90/kg due to significant improvement in quality as the trees mature. 629 tonnes of avocados were exported compared to 127 tonnes in the previous season,” he said, adding that macadamia nuts sales of 192 tonnes for the six months to September 2017 were 19 percent higher than 162 tonnes for the six months to September 2016.

Average price of $4,39/kg was 57 percent higher than $2,80/kg realised in the previous period.

In September 2017, Tanganda accessed the concessionary Reserve Bank of Zimbabwe’s export finance facility which has assisted significantly in sourcing inputs and retiring expensive debt. This development has placed Tanganda in a sound financial position.

The group’s hospitality unit registered a 13 percent increase in revenue to $8,7 million, with the growth primarily attributable to a surge in tourist arrivals in Victoria Falls after new airlines commenced flights to the resort town during the period under review.

The Meikles chairperson said room occupancy grew by 4,59 and 13,14 percentage points at Meikles Hotel and Victoria Falls Hotel respectively.

“The average room rate grew marginally at Victoria Falls Hotel. At Meikles Hotel the average room rate declined by 7 percent as the mix of business during the period was dominated by conference groups,” he said.

“Ebitda for the period grew by 84 percent to $2,1 million from $1,1 million in the previous year,” Moxon said and added that the lease for the Victoria Falls Hotel was recently renewed with planning of the refurbishment of the hotel was at an advanced stage.

Under its Meikles Stores and Meikles Mega Market unit, the diversified conglomerate closed seven outlets during the period under review due to working capital constraints.

“Ebitda for the period resulted in a loss of $1,8 million compared with a loss of $1,6 million in the previous year. Funding arrangements for working capital requirements have very recently been secured. The division will shortly be in a position to trade in a normal fashion and the turnaround lead period to profit is expected to be relatively short,” he said.

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