Meikles records 13pc increase in revenue. . . set to refurbish hotels, retail outlets

Property Reporter
Hospitality group, Meikles Limited is set to refurbish its hotels as revenue from the hospitality unit jumped 13 percent in the half year to September 30, 2017 compared to the same period last year. Refurbishment of its retail outlets under the TM/ Pick n Pay supermarkets, is already underway and expected to be completed before year-end with additional branches also set to be opened.

The hospitality unit comprising hotels in the resort town of Victoria Falls and Harare, reported a revenue jump of 13 percent to $8,7 million on the back of growth from a surge in tourist arrivals as new airlines commenced flights to Victoria Falls. Resultantly, room occupancy at Meikles and Victoria Falls hotels grew by 4,59 percentage points and 13,14 percentage points respectively.

“The average room rate grew marginally at Victoria Falls Hotel while Meikles Hotel the average room rate declined by 7 percent as the mix of business during the period was dominated by conference groups. The lease for the Victoria Falls Hotel was recently renewed. Planning of the refurbishment of the hotel is at an advanced stage,” said chairman John Moxon.

The hospitality unit’s earnings before interest, tax, depreciation and armotisation (EBITDA) for the period grew by 84 percent to $2,1 million from $1,1 million in the previous year, which was also 16 percent above the result for the full financial year ended 31 March 2017.

The group’s Meikles Stores and Meikles Mega Market had seven of its outlets closed during the period under review on the back of working capital constraints, although the group embarked on several cost containment measures. The unit’s EBITDA for the period resulted in a loss of $1,8 million compared with a loss of $1,6 million in the previous year.

“Funding arrangements for working capital requirements have very recently been secured. The division will shortly be in a position to trade in a normal fashion and the turnaround lead period to profit is expected to be relatively short,” said Mr Moxon.