Meikles shifts focus to retention

TINASHE MAKICHI

Diversified group, Meikles Limited will shift focus towards retention and consolidation of its investments in the supermarkets, hospitality, properties and security services segments after it has completed the demerger of its agro-processing concern, Tanganda.

According to the group, in the next three to five years, there is going to be a substantial growth in investment in new stores and upgrades to the existing stores will be implemented.

The latest projections comes after Meikles Limited is in the process of demerging its agro-processing concern which will list on the Zimbabwe Stock Exchange by way of an introduction on December 2.

Subject to fulfilment of the conditions precedent, the directors are proposing the demerger of Tanganda from the group. The proposed transaction will enable Meikles shareholders to own a direct shareholding in Tanganda.

A separate listing will be sought for Tanganda on the Zimbabwe Stock Exchange under the name Tanganda Tea Company Limited to be listed on the bourse on December 2.

“Post the unbundling of Tanganda, the group will focus on the retention and consolidation of its investments in the supermarkets, hospitality, properties and security services segments. In the next three to five years, a substantial growth in investment in new stores and upgrades to the existing stores will be implemented,” Meikles Limited chairman John Moxon said in a circular to shareholders.

He noted that the supermarkets segment has achieved growth in both profits and operating cash flows during prolonged tough trading conditions and since March 2020, worsened by disruptions brought in by the Covid-19 pandemic and this demonstrates resilience against shocks in the operating environment.

Moxon said the interest in supermarkets provides critical mass to deliver consistent returns to shareholders despite the impediments in the operating environment confronting businesses.

For the hospitality segment, he said both the Victoria Falls Hotel and Cape Grace Hotel are renowned for providing premium service to high end international tourists in their respective jurisdictions.

“Both hotels were profitable operations prior to the advent of Covid-19 pandemic. Strategies to reposition the hotels for a rebound in international tourism are being implemented.”

At the same time, other alternatives to enhance shareholder value are also being pursued and the refurbishment of the Victoria Falls Hotel commenced in June 2021 as part of the preparation for the anticipated rebound in international tourism and travel.

Moxon said the entry of Qatar Airways and the coming on board of Lufthansa which will fly to Victoria Falls three times a week from March 2022 bode well for the return of international tourism and travel.

He said strategic alternatives are being examined on how best to grow the properties to provide an opportunity for shareholders to enhance value and all remaining properties will be developed and leases have been signed.

Gondor Capital Limited, an investment vehicle of the Meikles family, is the controlling shareholder of Meikles  with a 47.08% stake.