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Business Reporter
Diversified hospitality group, Meikles Limited’s revenue for the third quarter to November 30, 2023 more than doubled to $613,1 billion on improved business compared to the same period in the prior year.
Company secretary Mr Thabani Mpofu highlighted revenue in historical cost terms rose 762 percent to $562,2 billion for the period under review while group total revenue for the nine-month period to November 30, 2023, jumped 111 percent to $1,7 trillion.
Profit margin remained at the same level as reported for the six months ended 31 August 2023 which stood at 34,78 percent.
“The group’s liquidity remained strong despite the tightening of trading terms in the economy, which gives the Group leverage in a harsh trading environment,” said Mr Mpofu in an update for the period under review.
He said the period under review remained challenging for businesses, characterised by persistent depreciation of the Zimbabwe dollar and increased dollarisation in the economy. During the period, the exchange rate increased by 784 percent year-on-year, considerably increasing the cost of transacting in the local currency.
According to a survey on consumer spending conducted by the Zimbabwe Statistical Agency (ZimStat), 80 percent of the transactions in the economy are in US dollars, while the balance of 20 percent is in local currency.
“In contrast, the percentage of revenue received in foreign currency by formal retailers is below 20 percent due to uncompetitive USD prices arising from compliance with the Government’s in-store exchange rate policy.
“There are ongoing engagements with monetary and fiscal authorities on changing the in-store exchange rate policy,” said Mr Mpofu.
In terms of operations, units sold and customer count increased at its supermarkets business trading as TM Pick n Pay by 5 percent and 2 percent respectively, for the quarter compared to last year.
According to the Group, this reversed the declining trend experienced in the preceding two quarters. The decline in units sold for the nine months eased to 6 percent from the 10 percent reported for the six months to 31 August 2023. The percentage of revenue received in foreign currency during the quarter and the nine months to date was below 20 percent despite an improvement from last year.
“This fell far short of the average of 80 percent per ZimStat’s consumer survey findings, primarily due to compliance with the in-store exchange rate policy
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“The in-store exchange rate policy remains an albatross on formal retail in attaining the dollarisation level reached by most businesses in the economy,” said Mr Mpofu.
He added this has resulted in ongoing supply chain challenges as suppliers are invoicing in US dollars and prefer settlement in US dollars.
The stores were relatively well stocked, hence the growth in units sold and customer count. Challenges were encountered in the range of stocks given the revenue split.
The hospitality business recorded room occupancy grew by five percentage points to 42 percent for the quarter from 37 percent achieved last year. The average room rate, in US dollar terms, was 13 percent above last year and, combined with the growth in room occupancy, resulted in a 29 percent growth in revenue per available room.
Revenue per available room rose by 50 percent for the nine months to 30 November 2023 due to a room occupancy growth of ten percentage points and a 12 percent increase in the average room rate.
The group is upbeat of its prospects for the full year as the last quarter of the financial year commenced on a strong note, with the units sold by the supermarkets in December surpassing those sold the previous year.
Said Mr Mpofu: “Our focus is on strengthening the group operations’ capabilities to adapt to the evolving trading conditions.”
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