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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Meikles Limited | LSE:MIK | London | Ordinary Share | ZW0009012114 | ZWR 0.1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Hotels And Motels | 230.86B | 6.25B | - | N/A | 0 |
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TIDMMIK
MEIKLES LIMITED
ABRIDGED UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2015
CHAIRMAN'S STATEMENT
Group Overview
Group turnover for the six month period to 30 September increased by 15%
relative to the previous period. The contribution to turnover by the different
segments of the Group is set out in Note 6.
Operating income increased by 18% relative to the previous period.
Whilst operating expenses excluding depreciation have increased by 3%, they
have reduced to 20% of turnover from 22% recorded in the comparative period.
The increase in operating expenses was caused by a growth in rents payable to
third parties as a result of growth in turnover and by a growth in utility
connected expenditures. Other costs, including employment costs, were static.
There has been a combination of employment cost reductions in segments of the
Group and the creation of further employment opportunities from growth projects
in the Group.
EBITDA increased by $6.4m relative to the previous period. The contribution to
EBITDA by the different segments of the group are set out in Note 6.
Interest payable decreased by 14% mainly due to the reduced borrowings.
Interest received decreased by 41%, as a result of reduced interest receivable
on outstanding balances due from the Reserve Bank of Zimbabwe. Net interest
payable increased by 12% to $3.7 million.
Fair value gains on biological assets reduced from $3.6 million to $0.66
million. Shareholders are reminded that these sums are non-cash flow in nature.
The movements relative to the Balance with the Reserve Bank of Zimbabwe and
Treasury Bills are detailed in Notes 4 and 5.
Group net borrowings are detailed in Note 7. Shareholders will observe that net
borrowings have decreased by approximately $22 million over the six month
period.
Negotiations on further sums considered due from the Reserve Bank of Zimbabwe
as disclosed in the 31 March 2015 annual report are in progress. It is
expected that this matter will be finalised very shortly and Shareholders will
be advised further at the appropriate time. Any resultant adjustment to the
financial results will be disclosed to Shareholders and will be included in the
results of the second half of the current financial year.
With the exception of trade and other receivables which reflect a positive
reduction for the period, other balance sheet items remained substantially
unchanged in total. Segment assets and liabilities are disclosed in Note 6.
Segment Commentary
TM Supermarkets trading as TM and PnP
Two new supermarkets were opened in Harare (Avondale and city centre) during
the period to 30 September but neither was operating for the entire period.
Other supermarkets were refurbished and this process is continuing into the
second half of the year.
Turnover increased by 17% and operating income expressed as a percentage of
turnover increased from 18% to 19.5%.
Expenses expressed as a percentage of turnover decreased marginally from 16.5%
to 16%.
Stock turns improved from 7.1 to 8.7 times.
TM is well positioned to redeem its term borrowings on schedule and these will
be repaid progressively over the next twelve months.
A major shopping centre development in Borrowdale in which TM is a participant
will commence shortly.
It is pleasing to note that TM does provide opportunities for further
employment in Zimbabwe and in this context it is an important contributor to
the economy.
On the 24 November 2015, The Confederation of Zimbabwe Retailers presented TM
PnP Supermarkets with a number of awards, including 'Supermarket of the Year -
Consumer's Choice' and 'Best Retailer - Environmental Management'.
Stores - Meikles Stores and Meikles Mega Market
The two divisions have not made a positive contribution to EBITDA in the six
month period, but they have achieved substantial financial improvement and have
performed in accordance with expectations. Shareholders have been advised that
these divisions will not make a loss in the second half of the year. This
remains appropriate.
The Confederation of Zimbabwe Retailers presented Barbours Department Store
with the 'Clothing Retailer of the Year' award on 24 November 2015.
Tanganda
Tanganda has been adversely affected in the period to 30 September by a
decrease in international bulk tea prices. Average prices fell to $1.28/kg from
$1.32/kg for the comparative period. It is expected that average bulk tea
prices will increase over the forthcoming period but will not yet reach the
favourable levels realised in the 2014 financial year.
Tanganda needs another two rainy seasons including the forthcoming season to
realize a material contribution from its diversification programme. This
programme does encapsulate the future of Tanganda, as a major contributor to
the agricultural sector of the economy.
The new packing machines are in operation in Mutare, and there is greater
mechanisation on the estates. The cost of producing both bulk and packed tea
has reduced, with considerable benefit to the company.
There may be uncertainty concerning the expectations of rains in the
forthcoming season. Tanganda has implemented an appropriate defensive strategy.
On 8 October 2015, Zimtrade presented Tanganda with the 'Zimtrade 2014 Best
Exporter of the Year Award - Processed Food Sector'.
Hospitality
The two hotels in Zimbabwe have been affected by the new value added tax, which
has had a material effect on revenue, as the value added tax could not be
passed on to guests in full. The South African visa requirements have also had
a negative effect on tourist arrivals.
Occupancies in Harare have shown a modest increase, while those at Victoria
Falls have declined.
Expenditures in both hotels have decreased.
The next phase of renovation at Victoria Falls will begin early in 2016. The
hotel will be in a strong position to defend its competitive position.
Meikles Hotel was presented with the '2015 Best City Hotel' award by
Association of Zimbabwe Travel Agents (AZTA) in September 2015 for the 23rd
consecutive year. The Victoria Falls Hotel was voted the '4th Best Resort in
Africa & Middle East 2015' by the Travel and Leisure magazine.
Outlook
The different segments of the Group are expected to continue to enhance their
performance. Growth associated with a number of projects underway in segments
of the Group are substantial and will provide a platform for further growth in
earnings. There may be uncertainties relating to the weather and to the
operating environment in general.
Appreciation
I would like to extend my appreciation to our customers, suppliers,
shareholders and regulatory authorities for their continued support. I would
also like to extend my appreciation to my fellow Directors, and to management
and staff for their dedication and commitment.
Dividend
The Board has not declared an interim dividend.
JRT Moxon
Executive Chairman
24 November 2015
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015
Unaudited Unaudited
30 September 30 September
2015 2014
US$ 000 US$ 000
Revenue 225,690 196,254
Net operating costs (225,241) (202,191)
Operating profit / (loss) 449 (5,937)
Investment income 1,783 3,047
Finance costs (5,446) (6,329)
Net exchange difference (177) 21
Loss recognised on disposal of Treasury Bills (4,009) -
Fair value loss on disposal of available-for-sale (3,691) -
financial assets
Fair value adjustments on biological assets 657 3,646
Loss before tax (10,434) (5,552)
Income tax (expense) / credit (373) 2,734
Loss for the period (10,807) (2,818)
Other comprehensive income, net of tax
Items that may be reclassified subsequently to profit
or loss:
Fair value gain on available-for-sale financial assets 10,722 -
Other comprehensive income for the period, net of tax 10,722 -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (85) (2,818)
(Loss) / income for the period attributable to:
Owners of the parent (12,179) (1,976)
Non-controlling interests 1,372 (842)
(10,807) (2,818)
Total comprehensive (loss) / income attributable to:
Owners of the parent (1,457) (1,976)
Non-controlling interests 1,372 (842)
(85) (2,818)
Loss per share (cents)
Basic (4.80) (0.78)
Diluted (4.46) (0.72)
Headline loss per share (cents) (2.29) (1.70)
Diluted headline loss per share (cents) (2.13) (1.58)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2015
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Unaudited Audited
30 September 31 March 2015
2015
US$ 000 US$ 000
ASSETS
Non-current assets
Property, plant and equipment 124,866 125,145
Investment property 248 249
Investment in Mentor Africa 22,931 22,931
Limited
Biological assets 42,834 41,083
Intangible assets 124 124
Other financial assets 12,088 12,246
Deferred tax 4,617 4,201
Total non-current assets 207,708 205,979
Current assets
Balances with Reserve Bank of - 7,229
Zimbabwe
Treasury Bills 11,727 22,942
Inventories 36,902 35,626
Trade and other receivables 13,058 19,893
Other financial assets 4,192 4,093
Cash and bank balances 16,188 8,883
Total current assets 82,067 98,666
Total assets 289,775 304,645
EQUITY AND LIABILITIES
Capital and reserves
Share capital 2,538 2,538
Share premium 1,316 1,316
Other reserves 10,808 87
Retained earnings 103,755 115,934
Equity attributable to equity 118,417 119,875
holders of the parent
Non-controlling interests 18,710 17,281
Total equity 137,127 137,156
Non-current liabilities
Borrowings 15,998 24,402
Deferred tax 13,215 12,508
Total non-current liabilities 29,213 36,910
Current liabilities
Trade and other payables 59,955 60,397
Borrowings 63,480 70,182
Total current liabilities 123,435 130,579
Total liabilities 152,648 167,489
Total equity and liabilities 289,775 304,645
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015
Share Share Non Investments
capital premium distributable revaluation
reserves
US$ 000 US$ 000 US$ 000 US$ 000
2015 - unaudited
Balance at 1 April 2015 2,538 1,316 12,559 (12,472)
Loss for the period - - - -
Other comprehensive income for the - - - 10,721
period
Funding from non-controlling interests - - -
-Mopani Property Development (Private) -
Limited
Balance at 30 September 2015 2,538 1,316 12,559 (1,751)
2014 -unaudited
Balance at 1 April 2014 2,538 1,316 12,559 12,559
Loss for the period - - - -
Balance at 30 September 2014 2,538 1,316 12,559 12,559
Retained Attributable Non Total
earnings to owners of controlling
parent interests
US$ 000 US$ 000 US$ 000 US$ 000
2015 - unaudited
Balance at 1 April 2015 115,934 119,875 17,281 137,156
Loss for the period (12,179) (12,179) 1,372 (10,807)
Other comprehensive income for the - 10,721 - 10,721
period
Funding from non-controlling interests - - 57 57
-Mopani Property Development (Private)
Limited
Balance at 30 September 2015 103,755 118,417 18,710 137,127
2014 -unaudited
Balance at 1 April 2014 155,455 171,868 14,222 186,090
Loss for the period (1,976) (1,976) (842) (2,818)
Balance at 30 September 2014 153,479 169,892 13,380 183,272
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015
Unaudited Unaudited
30 September 30 September
2015 2014
US$ 000 US$ 000
Cash flows from operating activities
Loss before tax (10,434) (5,552)
Adjustments for:
- Depreciation and impairment of property, plant 4,541 4,402
and equipment and investment property
- Net interest 3,663 3,282
- Net exchange difference 177 (21)
- Fair value adjustments on biological assets (657) (3,646)
* Loss recognised on discounting Treasury Bills 4,009 -
* Fair value loss on disposal of 3,691 -
available-for-sale financial assets
- Loss on disposal of property, plant and equipment 23 168
Operating cash flow before working capital changes 5,013 (1,367)
Increase in inventories (1,277) (2,317)
Decrease in trade and other receivables 6,654 192
(Decrease) / increase in trade and other payables (417) 2,799
Cash generated from / (used in) operations 9,973 (693)
Income taxes paid (86) (105)
Net cash generated from / (used in) operating 9,887 (798)
activities
Cash flows from investing activities
Payment for property, plant and equipment (4,316) (13,763)
Proceeds from disposal of property, plant and 30 63
equipment
Proceeds from sale of Treasury Bills 22,951 11,418
Net movement in other investments 61 (61)
Net expenditure on biological assets (1,098) (921)
Investment income 297 457
Net cash generated from / (used in) investing 17,925 (2,807)
activities
Cash flows from financing activities
Net decrease in interest bearing borrowings (15,106) (6,803)
Proceeds on disposal of partial interest in a 57 -
subsidiary without loss of control
Finance costs (5,446) (6,330)
Net cash used in financing activities (20,495) (13,133)
Net increase / (decrease) in cash and bank 7,317 (16,738)
balances
Cash and bank balances at the beginning of the 8,883 22,952
period
Net effect of exchange rate changes on cash and (12) (7)
bank balances
Cash and bank balances at the end of the period 16,188 6,207
NOTES TO THE ABRIDGED UNAUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The abridged unaudited financial results are prepared from statutory records
that are maintained under the historical cost basis except for biological
assets and certain financial instruments which are measured at fair value.
Historical cost is generally based on the fair value of the consideration given
in exchange for assets. These abridged unaudited results do not include all
information and disclosures required to fully comply with IFRS and should be
read in conjunction with the Group's annual report for the year ended 31 March
2015.
2. Currency of reporting
The abridged unaudited financial results are presented in United States dollars
which is the functional currency of the Group.
3. Accounting policies
Accounting policies and methods of computation applied in the preparation of
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these abridged unaudited financial statements are consistent, in all material
respects, with those applied in the preparation of the Group's annual financial
statements for the year ended 31 March 2015, with no significant impact arising
from subsequent new and revised International Financial Reporting Standards
(IFRSs).
4. Balance with the Reserve Bank of Zimbabwe
The movement in the balance with the RBZ from 1 April 2015 to 30 September 2015
is analysed below:
Unaudited Audited
30 September 31 March
2015 2015
Note US$ 000 US$ 000
Balance at beginning of period 7,229 90,861
Nominal value of Treasury Bills received i (8,729) (71,156)
Provision for settlement discount - (14,705)
Interest 1,500 2,229
Balance at end of period - 7,229
Analysis of balance
Amount due in cash on 31 March 2015 ii - 5,000
Interest - 2,229
Balance at end of period - 7,229
Notes:
i. The fair value of the Treasury Bills received by the Company from the RBZ
is US$7.6 million and the basis of calculating the fair value of the
Treasury Bills is set out in note 5.
ii. The amount of US$5 million which was due and payable in cash by 31 March
2015 was received in the form of Treasury Bills with a nominal value of
$6.5 million on 31 August 2015.
5. Treasury Bills
Details of the movement in the Treasury Bills are as follows:
Unaudited Audited
30 September 31 March
2015 2015
US$ 000 US$ 000
At fair value:
Balance at the beginning of the period 22,942 -
Treasury Bills received during the period 7,611 47,084
Treasury Bills disposed during the period (26,960) (27,166)
Fair value adjustments 6,648 -
Treasury Bills on hand at 30 September 2015 10,241 19,918
Accrued interest 1,486 3,024
Balance at 30 September 2015 11,727 22,942
Treasury Bills have been designated as "available-for-sale" (AFS) financial
assets and were initially recognised/measured at fair (market) value. The fair
(market) value of the Treasury Bills on initial recognition was calculated
based on a yield to maturity of 17%. This yield to maturity was determined with
reference to the percentage discount to the nominal value of the Treasury Bills
at which the Company has been able to sell certain of the Treasury Bills in the
open market.
Interest income on the Treasury Bills is recognised using the effective
interest rate method and is included in "Investment income" in the Statement of
Profit or Loss and Other Comprehensive Income.
Treasury Bills with a nominal value of US$13.1 million are pledged as security
for loans.
Treasury Bills issued by the Reserve Bank of Zimbabwe held at 30 September
2015:
Unaudited Audited
30 September 31 March
2015 2015
At fair (market) value US$ 000 US$ 000
Treasury Bills maturing on 10 April 2017 with a 11,727 -
coupon rate of 5%
Treasury Bills maturing on 11 June 2018 with a - 10,922
coupon rate of 2%
Treasury Bills maturing on 10 June 2019 with a - 8,375
coupon rate of 2%
Treasury Bills maturing on 23 December 2016 with - 3,645
a coupon rate of 5%
11,727 22,942
The Treasury Bill number ZTB73120150410Z on hand at 30 September 2015 was
re-issued on 10 April 2015 with a nominal value of $31,886,811. This Treasury
Bill was partially disposed during the period and the nominal value on hand
at the reporting date was $13.1 million. The coupon payment dates are 10
April and 10 October.
6. Segment information
Unaudited Unaudited
30 September 30 September
2015 2014
US$ 000 US$ 000
Revenue
Supermarkets 196,731 167,995
Hotels 8,267 8,814
Agriculture 11,193 11,135
Departmental stores 3,103 3,773
Wholesaling 7,230 5,395
Corporate* (834) (858)
225,690 196,254
EBITDA
Supermarkets 6,963 3,182
Hotels 1,189 1,396
Agriculture (292) (878)
Departmental stores (570) (1,957)
Wholesaling (874) (1,049)
Corporate* (1,425) (2,228)
4,991 (1,534)
The EBITDA figures are before Group management fees.
Unaudited Audited
30 September 31 March 2015
2015
US$ 000 US$ 000
Segment assets
Supermarkets 87,644 83,464
Hotels 49,200 49,216
Agriculture 74,077 75,270
Departmental stores 31,045 30,516
Wholesaling 3,844 2,048
Corporate* 43,965 64,131
289,775 304,645
Segment liabilities
Supermarkets 50,826 49,524
Hotels 21,473 20,922
Agriculture 30,736 33,933
Departmental stores 15,938 16,533
Wholesaling 4,352 3,542
Corporate* 29,323 43,035
152,648 167,489
*Intercompany transactions and balances have been
eliminated from the corporate amounts. Corporate also
includes other subsidiaries that are immaterial to
warrant separate disclosure
7. Net borrowings
Non-current borrowings 15,998 24,402
Current borrowings 63,480 70,182
Total borrowings 79,478 94,584
Cash and cash equivalents (16,188) (8,883)
Net borrowings 63,290 85,701
The weighted average capitalisation rate on funds borrowed was 11.81% (2014:
12.61%) per annum. The borrowings are secured by freehold land and buildings
with a carrying value of $61.8 million, Treasury Bills with a nominal value of
$13.1 million, inventory worth $6.5 million, trade receivables amounting to
$4.7 million, negative pledge over assets for borrowings worth $4.4 million and
unlimited cross company guarantees on borrowings amounting to $24.5 million.
Unaudited Unaudited
30 September 30 September
2015 2014
US$ 000 US$ 000
8. Depreciation, amortisation and impairment
Depreciation of property plant and equipment 4,417 4,324
Impairment of property, plant and equipment 123 77
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