Chronicle Editor
Sikhulekelani Moyo, [email protected]
DIVERSIFIED listed group, Meikles Limited says sales for the first quarter of the financial year exceeded expectations and the group will continue with planned development projects as it has the technical resources, skills and substantial cash resources to undertake its objectives.
The pipeline of projects includes the refurbishment works on the main building in Bulawayo, expected to commence soon.
In abridged audited financial results for the period ended 28 February 2023, chairman Mr John Moxon said the Group demonstrated resilience to adverse changes in the operating environment as it was able to adapt and respond to several challenges.
Group revenue grew to $278.9 billion (Previous year: $191.7 billion) representing a 45 percent increase.
“In historical cost terms, revenue grew by 356 percent to $230.9 billion (Previous year: $ 50.7 billion). Growth in sales units was achieved at the supermarket segment under tough operating conditions characterised by declining customer disposable income during the greater part of the period under review,” he noted.
Gross profit margin decreased by two percentage points to 23 percent from 25 percent in the previous year, partly reflecting the impact of the Supermarket segment’s strategic thrust on responsible pricing to support customers during the challenging times.
In addition, the sales mix was dominated by grocery items that have low margins.
Group net operating costs increased by 63 percent to $67.1 billion (Previous year: $41.3 billion).
Mr Moxon said the group made an operating loss of $2.0 billion (Previous operating profit: $ 6.5 billion) which was due to the reduction in gross profit margin combined with the increase in operating costs.
On a positive note, the operating loss was surpassed by the gains from the management of the monetary assets and liabilities.
“In historical cost terms, operating profit increased by 299 percent to $14.8 billion on a like for like basis.
Profit after tax (excluding investment income of $3.6 billion and $179.0 million profit on distribution of subsidiary equity to shareholders in the previous year) declined by 48 percent to $3.1 billion.
In the period under review, capital expenditure was $7.9 billion and was all financed from internally generated cash flows.
Under the supermarkets segment trading as TM Pick n Pay revenue grew by 44 percent to $275.6 billion.
Supplier payment terms tightened, and the cost of goods escalated in response to high-interest rates and inflation.
“Profit after tax decreased by 40 percent to ZWL 4.2 billion (Last year: $7.0 billion). In historical terms, profit after tax increased by 254 percent to $11.8 billion.
“Despite the reduction in profit margins, the segment funded its store expansion and refurbishments from operating cash flows. Three new stores, Highland Park, Madokero and Simon Mazorodze, were completed and opened during the period under review,” said the chairman.
In addition, he noted that two new stores were at an advanced stage of completion at the reporting period.
In the hospitality unit, revenue increased by 242 percent to $2.6 billion from $750 million last year.
Revenue growth was 107 percent in US dollar terms. The growth was on the back of an increase in room occupancy of 11.57 percentage points to 28.33 percent, combined with a 15 percent increase in the average room rate in US dollar terms.
Profit after tax increased to $1.3 billion from $563 million in the previous year.
The refurbishment of 47 rooms of The Victoria Falls Hotel was completed during the period under review, a development which bodes well for the hotel’s competitive positioning in the market.
On properties, Mr Moxon said the planned development and repurposing of the main property in Mutare was completed during the period under review and all the available space was taken up by tenants.
In addition, the mall along South Avenue, in Harare was completed and is fully occupied by tenants.
Refurbishment works on the main building in Bulawayo will commence in due course.
-@SikhulekelaniM1
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