TINASHE MAKICHI
Zimbabwe Stock Exchange-listed, Meikles Limited, is targeting real estate where the diversified group is looking at face-lifting part of its central business district properties for letting out to various operators.
The consumer staples concern has since discontinued operations of its department stores which included Greatermans, Barbours and Meikles. Part of the buildings which used to house these operations are targeted for renovations and eventual letting out.
Barbours Building, however, belongs to Local Authorities Pension Fund (LAPF).
Meikles Limited chairman, John Moxon, told Business Times that a plan was in place to make the currently dormant buildings useful, with an extensive refurbishment plan already in place, citing that demand for space was huge.
“Our own buildings are all scheduled for renovation and for letting out. Not necessarily to small or medium players, tenants to include TM Pick n Pay, and some other large operators. There is a good demand for space, due to the physical position of the properties”
“Barbours building belongs to LAPF. I don’t know their plan for the building. We are not involved,” Moxon said.
Meikles Limited is also looking at building internal power generation capacity and work on a 1.8MW solar project at Tanganda’s Ratelshoek, the group’s biggest estate. The project will commence before end of March 2020 while similar projects will be rolled out at the remaining four estates at Tanganda.
“The group requires capital to build internal power generation capacity to ensure agricultural export operations run smoothly through having access to power supply at critical times of crop development and processing,” Moxon said.
“The proceeds from the proposed disposal of Meikles Hotel will assist the Group to promptly construct the power generation plants.”
The group’s export oriented projects at Tanganda are now being implemented, but will require additional borrowings, which is not considered desirable. Meikles Limited is, however, confident of a brighter future despite the US$20m sale of one of its flagship assets Meikles Hotel to United Arab Emirates billionaire, Ali Albwardy.
The proceeds from the hotel sale will be channelled towards various expansion projects at Tanganda, TM Pick n Pay and Victoria Falls Hotel. The hotel sale which was criticised in some circles left a lot of stakeholders in the dark on what the future holds for the diversified Group.
This comes after the Group had also discontinued operations of its department stores units. Moxon said the Group fared well in a turbulent economic environment characterised by drought, high inflation affecting disposable incomes and foreign currency shortages resulting in intermittent supply of electricity and fuel.
Group earnings before interest, tax, depreciation and amortisation for the period amounted to ZW$223.5m compared to ZW$31.8m of the previous year. Meikles Limited profit after tax from continuing operations was ZW$158.5m compared to ZW$16.1m while other comprehensive income amounted to ZW$336.4m and is entirely due to uplift of foreign assets from the exchange rate at the end of March 2019.
Group net cash balance after deducting Group bank borrowings amounted to ZW$73.4m as at March 31, 2019 while net borrowings were at ZW$30.m). Moxon said the group aims to expunge bank loans at the holding company and department stores from operating cash flows before March 2020.
