Online Reporter
Tapiwanashe Mangwiro
MEIKLES LIMITED says its diversified portfolio is positioning the group for a stronger close to the financial year, despite a challenging six-month period ending 31 August 2025, marked by subdued consumer spending and high operating costs.
Chairman Fayaz King said the group had endured a difficult operating environment across its businesses, although signs of recovery were emerging, particularly in tourism and property, as well as late-period momentum in the supermarket segment.
The repeal of Statutory Instrument 81A of 2024, through SI 34 of 2025, allowed formal retailers to regain some pricing competitiveness against informal traders.
“The authorities’ tight monetary policy contributed to price stability, although it simultaneously suppressed consumer demand,” said Mr King, noting that cost pressures remained prohibitively high for formal enterprises.
Meikles Supermarkets, trading as TM Pick n Pay, generated inflation-adjusted revenue of ZiG5,9 billion, an 11 percent increase from the previous period.
In US dollar terms, revenue was estimated at US$188 million, reflecting a 6 percent decline. Units sold fell by 1 percent.
A new branch was opened in Shurugwi, and the share of USD revenue increased to 36 percent, up from 25 percent the previous year, peaking at 48 percent in August.
Gross margins fell to 28 percent from 31 percent, while operating costs rose to 31 percent from 27 percent.
“Profitability was adversely affected by both the contraction in gross margin and the increase in operating expenses,” said Mr King, highlighting the intensity of rising operational costs.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the supermarket segment rose sharply to ZiG83,2 million, from ZiG33 million previously, indicating that turnaround measures were beginning to take effect.
The segment posted a loss after tax of ZiG143 million in inflation-adjusted terms, compared to a profit of ZiG27 million last year. Despite the loss, working capital management remained tight, with no reliance on borrowings and consistent stock availability across branches.
The hospitality division delivered the strongest performance in the group, as revenue nearly doubled to ZiG96,6 million, from ZiG44,6 million a year earlier. In USD terms, revenue increased by 10 percent, supported by a 9 percent rise in the average room rate and a one-percentage-point improvement in occupancy.
The board reversed its earlier plan to divest from the hospitality business, citing renewed optimism.
“The outlook for tourism remains highly encouraging,” said Mr King, adding that the sector had been boosted by global recognition.
Forbes recently named Zimbabwe the world’s number one destination to visit in 2025, a development expected to stimulate international arrivals. Profit after tax in the hospitality division reached ZiG12,5 million, up from ZiG6,1 million.
“The segment’s performance reflects the strengthening of Zimbabwe’s tourism brand,” said Mr King, emphasising the long-term value of maintaining the Group’s hospitality assets.
The property segment recorded revenue of ZiG21 million, up from ZiG14,8 million.
With effect from 1 March 2025, the segment shifted its functional currency to the US dollar, lifting USD-denominated revenue by 41 percent. Prior year comparisons were complicated by distortions arising from hyperinflation and multiple exchange rates.
Profit after tax was ZiG3,3 million, compared to ZiG6,5 million last year.
The previous year benefited from a once-off gain of ZiG24 million from property disposals.
The group completed the refurbishment of its flagship building in Bulawayo, with tenants already taking occupancy. The revamped property is expected to become a consistent income driver.
Group revenue grew to ZiG6,0 billion in inflation-adjusted terms, from ZiG5,4 billion. EBITDA rose 74 percent to ZiG70,7 million. Exchange losses ballooned to ZiG65,1 million due to the revaluation of USD-denominated payables.
Meikles posted a group after-tax loss of ZiG165,7 million, compared to a marginal loss of ZiG1,5 million last year.
“The result reflects the challenging macroeconomic conditions impacting the retail sector,” said Mr King, though he stressed the group’s resilience, “The Group’s solvency and liquidity positions remain robust.”
The group expects an uptick in supermarket sales as the festive season approaches. September and October showed an overall improvement from earlier months.
“From a working capital perspective, the segment is well-positioned to fully stock up in anticipation of elevated demand,” said Mr King.
The chairman said the group remained optimistic about performance across all segments for the rest of the financial year.
No interim dividend was declared, as the Board opted to preserve cash given the economic climate.
