This Interim Management Statement is issued by Meikles Limited in accordance with the UK Listing Authority’s Disclosure and Transparency Rules. Unless stated otherwise, key trends and figures highlighted below refer to the three months ended 30 June 2014 and the corresponding period in the previous financial year (F2014).
Operating and regulatory environment
The deflationary trend in the economy remains a threat. Aggregate demand continues to decline and the tight liquidity situation in the Financial Markets is evident.
We understand a more practical approach is being adopted by the authorities in their implementation of the Indigenisation laws and regulations. This positive approach is required to attract new investors and stimulate economic growth.
Funds held on deposit with the Reserve Bank of Zimbabwe
The position on this matter remains as reported in our Chairman’s Statement dated 13 August 2014. The Company is awaiting receipt of the balance of the Treasury Bills and discussions with relevant authorities on yield and tenure of the Bills already in our possession are progressing well.
As reported in our last Chairman’s Statement, Meikles Centar Mining is in the process of finalising regulatory approval for the purchase of a number of gold mines in the Matabeleland area of Zimbabwe. Funding is available from an external investor and we hope the transaction will be completed by the end of September 2014.
TM Supermarkets turnover for the quarter ended 30 June 2014 increased by 2% compared to same period in F2014 and margins remain stable though under pressure due to the depressed economic environment. We have completed the refurbishment of two branches post the end of F2014 and currently six branches are under refurbishment to be completed before the end of our financial year.
Meikles Mega Market has opened two new stores bringing its stores portfolio to three and is progressing its expansion plans. The turnover levels are steadily increasing as a result of the increased trading area.
The departmental stores are trading from a reduced store footprint following the consolidation that started in prior periods. The turnover for the first quarter was 31% below that of the comparative period, however, the operating losses are reducing as result of the rationalisation. This process is still ongoing.
The ongoing expansion of our Estates continues and we will complete this project by the target date of March 2015.
The first “fly” crop, off the early planted coffee will be harvested from October 2014 and indications are that the crop will be larger than originally envisaged.
The avocado and macadamia plantations are progressing well and we are planning to erect a pack house for the handling of product later in the year.
Tea prices for bulk tea exports remain depressed. Exports of packaged tea to Zambia have shown an increase of 29% during the quarter ended 30 June 2014.
The new tea packaging machinery has been installed at our Mutare factory and the increased capacity of the plant will enable us to consider entering new export markets.
The occupancy levels for the Victoria Falls Hotel were 55% compared to 45% for the comparative period. The Revpars increased by 42%. The number of tourist arrivals in the resort town of Victoria Falls continues to grow and forward bookings for the next six months are very encouraging.
Meikles Hotel’s occupancy levels for the first quarter were 34% compared to 37% for the period to 30 June 2013. The Revpars have decreased by 9%. This is business focussed hotel and forward bookings for both conferences and the business traveller segments are very positive.
The Cape Grace Hotel in Cape Town continues to perform exceptionally well and should deliver very good results at the half year.
On completion, the retail projects currently underway will improve our performance. The Hospitality operations continue to do well and the outlook is positive. The agricultural operations which are weather dependent are forecast to have a better outturn aided by the first yields on the coffee plantations. We expect to conclude the recovery of our funds held on deposit at the RBZ in the coming weeks and this will have a positive impact on borrowing levels and interest charges. We hope the regulatory approvals will be availed on our mining ventures to allow for operations to start in the near future.
Issued on 1 September 2014
- The financial information on which this statement is based has not been reviewed and reported on by the Group’s auditors.
- Please note that matters highlighted above may contain forward looking statements which are subject to various risks and uncertainties and other factors, including, but not limited to:
- business conditions
- climatic conditions
- political environment
- market related risks
- A number of these factors are beyond the Group’s control.
- These factors may cause the group’s actual future results, performance or achievements to differ from those
expressed or implied.
- Any forward looking statements made are based on the knowledge of the Group as at 1 September 2014.
To download the full Interim Management Report, please click on the link below:
- MEIK.zw | Interim Management Report – 1 Sep 2014