Meikles to sell off assets
CLOUDINE MATOLA
The Zimbabwe Stock Exchange listed diversified conglomerate, Meikles Limited is in talks to sell off some of its assets as part of efforts to increase shareholder value and optimise its portfolio, Business Times can report.
Meikles operates one of the country’s largest supermarket chains, TM Pick n Pay supermarkets. Meikles owns a 51% stake in the TM Pick n Pay supermarkets while Pick n Pay South Africa holds the remaining 49%.
Additionally, Meikles operates the largest grower, packer and distributor of tea products in Zimbabwe,Tanganda Tea Company and Meikles Mega Market stores.
By means of a joint venture agreement with African Sun Limited, the Meikles Group leases and operates the Victoria Falls Hotel.
The latest discussions about selling assets comes after Meikles Limited sold Meikles Hotel to Dubai billionaire, Ali Albwardy, who made the purchase through one of his investment vehicles involved in the hospitality business, Albwardy Investments. The hotel has since been rebranded to Hyatt Regency Harare The Meikles. The Hyatt Regency brand is a global chain of hotels and resorts that can be found in more than 200 locations across more than 40 countries.
Board Chair of Meikles Limited John Moxon (pictured) issued a cautionary statement in which he said the firm would be asking its shareholders to approve the planned disposal at an extraordinary general meeting that would be called at a later time.
According to Moxon, the action is intended to improve efficiency, realign the company’s activities around its core competencies, and set it up for future growth.
“…..The Company is in discussions to dispose of certain of its assets,” Moxon said.
He added: “The proposed disposal transaction may constitute a “Category 1” transaction under Section 253 of SI134/2019. Accordingly, the company would be seeking the approval of its shareholders for the proposed disposal at an Extraordinary General Meeting to be convened at a future date. If concluded, the transaction may have a material effect on the company’s shares.”
In its financial results for the 12 months to February 29, 2024, Meikles Limited reported a 430% increase in profit to ZW$469.5bn from ZW$88.6bn achieved in the previous year. Revenue across all sectors grew by 102% to ZW$10.4 trillion in the period under review from ZW$5.2 trillion reported in the previous year.
Also, gross profit margin was maintained at 22.8%, the same as last year, despite the exchange rate-induced volatility in the prices of goods.
The net operating costs grew by 121% reflecting the impact of the depreciating exchange rate and most prices, including wages and salaries, were pegged in United States dollars and converted to the local currency at exchange rates prevailing at settlement. Supermarkets revenue received in foreign currency during this period was below 20% of the total revenue. As a result, this fell far short of the average mix of transactions conducted in foreign currency in the economy, which was 80% in United States dollars, due to the uneven enforcement of the in-store exchange rate policy.
Revenue for the hospitality segment increased by 53% in United States dollars terms as a result of 8 percentage points increase in room occupancy to 37% combined with a 15% increase in the average room rate.
