Meikles, govt reach settlement

TINASHE MAKICHI

Listed diversified group, Meikles Limited, has accepted a financial and non-financial settlement offer from the government for the funds deposited with the Reserve Bank of Zimbabwe (RBZ) more than two decades ago.

The funds stem from 1998, when RBZ used some of Meikles’ funds relating to the group’s listing on the London Stock Exchange that had been deposited with the central bank.

The initial debt was for about US$20m but as at May 31, 2014, it had reached US$49m.

The group received the full financial settlement in October 2021 and the details of the non-financial aspect of the settlement are still under discussion with the government, Meikles said.

Meikles Limited chairman John Moxon said the portion of the settlement will create an opportunity to exploit further investments in addition to those already planned.

“The group accepted both a financial and non-financial settlement offer from the Government for the funds deposited with RBZ. The group received the full financial settlement in October 2021,” Moxon said.

“The details of the non-financial aspect of the settlement are still under discussion with the government.”

In the six months to September 30, 2021, Meikles revenue from continuing operations, grew by 28% to ZWL$20bn in inflation-adjusted terms from the same period last year due to a strong performance by the supermarket segment.

The group operating profit for the period increased by 156% to ZWL$1bn compared to ZWL$391.1m.

The group’s profit after tax of ZWL$1.6bn was impacted positively by investment income and by the growth in operating profit.

The group achieved an increase in liquid financial resources despite the trading environment and continued Covid-19 trading restrictions.

The statement of financial position strengthened with the current ratio improving to 1.77 times from 1.60 times on March 31, 2021.

Cash and bank balances increased by 58% to ZWL$1.5bn from ZWL$0.95bn.

On segmental performance, TM Supermarkets trading as TM Pick n Pay’s revenue for the period was ZWL$20bn in inflation adjusted terms compared to ZWL$15.2bn of the previous period.

Units sold grew by 27% during the period under review.

Sales units’ volume accelerated after September 30 2021, and it is expected to result in a stronger financial performance in future months.

Operating profit for the period amounted to ZW$1.2 bln in inflation adjusted terms, compared to ZWL$463.9m achieved in the previous period.

Moxon noted that refurbishment of the stores is progressing as planned.

During the period under review, the Newlands store was renovated and reopened in September 2021.

Two more stores are expected to be completed by the end of December 2021.

In addition, work is under way on new stores that are expected to come on stream during the first half of the next financial year.

On the hospitality segment, this segment’s operations in Victoria Falls continued to be affected by Covid-19 disruptions to international tourism and travel.

Room occupancy for the period under review was 12.89%.

“Our focus is on completion of the refurbishment of gorge facing rooms of the hotel prior to the end of the first quarter of year 2022,” Moxon said.

On properties segment, the building located at 90 Speke Avenue in Harare was sold during the period under review and the proceeds are ear-marked for the development of existing properties at strategic locations.

Extension of the building in Mutare was completed and the tenant took occupation of the new area in October 2021.

Development plans of the remaining buildings in Harare, Bulawayo and Masvingo are being finalised for completion in 2022.

In the outlook, Moxon said the group is well set to execute its expansion plans as it has substantial resources to support its strategies.

Meikles is optimistic that capital projects across the subsidiaries will be completed as planned.