LIVINGSTONE MARUFU
Listed diversified group, Meikles Limited’s profit for the six months to September 30 2020 retreated 91% to ZWL$189m from ZWL$2.1bn recorded in the prior comparative period due to a massive monetary loss and the hospitality segment which was hammered by the negative effects of the Covid-19 pandemic.
The group recorded a monetary loss of ZWL$1.1bn arising from US$ denominated bank and receivable balance.
Meikles Limited sold its iconic Meikles Hotel in the Harare central business district, remaining with Victoria Falls Hotel, which was completely shut down during the lockdown to combat the spread of Covid-19. Agriculture exports’ movements were also affected by international lockdowns.
During the period under review, international tourism and travel was disrupted by the Covid-19 pandemic.
The Victoria Falls Hotel reopened on November 1, 2020 following the resumption of domestic and limited international flights after the government eased restrictions in September 2020.
“The trading environment during the period under review remained turbulent and was exacerbated by the effects of the Covid-19pandemic and hospitality segment’s operations were closed for the entire six months under review,” Meikles chairman, John Moxon said.
Inflation adjusted revenue for the group went down 8% in the reviewed period to ZWL$11.2bn from ZWL$12.1bn in the prior comparative period.
The financial position for the group, however, remained strong despite Covid-19 disruptions during the period under review.
Total assets for the group stood at ZWL$14.7bn from ZWL$14.02bn.
The group’s flagship supermarket chain, TM Supermarkets trading as TM and Pick n Pay, reported an inflation adjusted revenue of ZWL$10bn, down from ZWL$10.8bn reported in the prior comparative period.
Units sold declined by 31% during the period under review due to Covid-19 restrictions and shrinking disposable incomes.
The retail segment lost trading days as seven branches closed for days for disinfection purposes following Covid-19 cases.
Operating profit for the segment amounted to ZWL$306.1m in inflation adjusted terms, compared to ZWL$411.7m achieved in the previous period.
Meikles opened a new store in Aspindale, Harare in July despite constraints brought about by Covid-19.
The company will also open another Pick n Pay retail in Harare before year-end.
Revenues for Tanganda declined 15% to ZWL$935m during the period under review from ZWL$1.1bn achieved during the six months to September 30, 2019.
Tanganda’s operating profit declined to ZWL$402.9m compared to ZWL$604.5m in the previous period.
Bulk tea export sales declined 11% to 3 282 tonnes from 3669 tonnes sold in the comparative period last year.
International average bulk tea export price for the period retreated to US$1.35/kg from US$1.47/kg in the six months’ period to September30 2019.
Bulk tea production for the period declined by 17% primarily due to adverse weather.
The volume of avocado export sales grew 15% to 1671 tonnes from 1 450 tonnes in the comparative period.
However, due to the lockdowns in Europe that resulted in massive closure of restaurants and hotels, the avocado average selling price declined 37% from US$1.62/kg in the half year ended September 30 2019 down to US$1.02/kg for six months ended September 30 2020.
Moxon said Meikles’ plans to transform and reconfigure the group’s properties have been finalised and roll out has commenced. Some of the properties will be disposed of and proceeds reinvested in strategic locations.
He said the group was well placed to take advantage of opportunities that may arise as it has substantial resources to support its strategies.
The construction of the 1.8 MegaWatt solar farm at Ratelshoek, Chipinge was completed in September 2020.
The plant is now supplying power for irrigation and acting as a standby source of power for the factory, supported by diesel generators when power supply from the National grid is interrupted.
During the current power outages 70% diesel savings have been realised when compared with prior year usage.
Two more solar power plants are under construction at Tingamira and Jersey estates and are scheduled for completion by January 2021.
The company intends to declare two interim dividends and a final dividend based on profits for the year.
The first interim dividend declared is ZWL 42.5 cents per share amounting to ZWL$111m which is the same as the final dividend in the previous year.
The group is expecting a gradual revenue growth in the second half of the financial year.
