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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 | 2.1T | 12.74B | - | N/A | 0 |
RNS No 6673u MEIKLES AFRICA LIMITED 16th November 1998 MEIKLES AFRICA LIMITED Interim Results for the six months ended 30 September 1998 Meikles Africa Limited, the Zimbabwe-based hotel and retail group, which floated on the Zimbabwe and London Stock Exchanges in 1996, announces a significant increase in half year profits. * Turnover up 39% to Z$1701m (*#33.7m) * Group operating profit up 64% to Z$164m (*#3.2m) * Net exchange gains of Z$768m (*#15.2m) * Victoria Falls Hotel performing well, following recent acquisition (*The sterling figures represent only a convenience translation at the Z$:# exchange rate of Z$50.48 to #1 applying at close of business on 28 November 1998.) John Moxon, Chairman, said: 'Due to the poor economic environment in Zimbabwe, trading conditions have not been easy in the last six months. However, we have achieved excellent results with major revenue and profit increases as a result of our close attention to costs and operational efficiency. The Victoria Falls Hotel acquisition is already showing its worth with a strong performance to date.' Enquiries: Meikles Africa Limited Tel: +263 4 730 611 John Moxon, Chairman Charles Golding, Finance Director College Hill Tel: +44 171 457 2020 Mark Garraway / Nicholas Williams CHAIRMAN'S STATEMENT Introduction We are pleased to be able to report a robust performance for the half year which includes the acquisition of a 50% share of the Victoria Falls Hotel operations, despite the problems of the economy impacting on the consumer spending and confidence generally. Turnover at $1701 million, including the Group's share of two months operations of the Victoria Falls Hotel, shows an overall increase of 39%, with a growth of 64% in operating profits to $164 million. Turnover on comparable activities was 36% up on the same period in the previous year, and operating profits were up 45%. The trend in the last few months has shown a marked upturn in turnover due to rising inflation and the fall of the Zimbabwe dollar. Expenses have been contained within budget. Productivity and stockturns continue to improve through management effort. Headline earnings per share at 552c (previous year 86c) include unrealised exchange gains. The Board has recommended an interim dividend of forty cents based on a cover of one times earnings, excluding exchange gains. Hotels The acquisition of a 50% share in the business of the Victoria Falls Hotel was a strategic investment in a hard currency earning business which complements the Meikles Hotel and affords management and guest synergies. The acquisition was made using borrowed funds rather than our US dollars in view of the current pressure on the Zimbabwe currency. Since then, in US dollar terms, the purchase price has more than halved, fully justifying management's decision. The effective date of the agreement was 1st April 1998, however we only became actively involved in management from 1 August 1998. Accordingly interest expense less our share of profits, from the effective date to 31 July 1998 has been included as part of the cost of acquisition of $377million. The Victoria Falls Hotel is performing well. Our share of turnover and operating profits for the two months to 30 September 1998 amounts to $33 million and $19 million respectively. Tourism arrivals are reflected in good occupancy levels. Application has been made for Victoria Falls Hotel to become a member of the Leading Hotels of the World, so that it will be marketed worldwide through their global distribution system. The ISO 9002 quality standards programme is now being implemented, and this will enhance the hotel's product, service and efficiency. The partnership management structure has settled down well, and negotiations are in progress to purchase the Victoria Falls real estate. Meikles Hotel room occupancy for the six months is below the same period last year, due to the drop in business arrivals. However, the average room rate has grown substantially over the same period, due primarily to the depreciation of the Zimbabwe dollar. This growth was particularly strong in the last two months. Total sales of Z$122 million have grown by 32% with a rising trend and the operating profit by 31% to Z$49 million over the comparable period of the previous year. The International ISO9002 quality standards certification has been renewed, and the South Wing refurbishment of 187 suites and bedrooms will be completed by December 1998. TM Supermarkets At Z$1251 million, TM Supermarkets has achieved an increase in turnover of 39% indicating real growth following the recent refurbishment and expansion. This has resulted in an operating profit growth of 50% to $73 million. These favourable trends have accelerated in recent months. Two new stores will be opened early in 1999, bringing the total number of units to 49. Negotiations continue to secure several prime sites which have been identified. TM has recently introduced several products under the TM Supa Saver housebrand which has enjoyed tremendous consumer support that has been far greater then our expectations or that of our suppliers. A 'Buy Zimbabwe' campaign has been mounted to run from now through the Christmas season. Retail and Leisure Sales in the Retail and Leisure Division, which comprises the Department Stores, the Clicks/Diskom chain and the Food Franchises were up 28% over the same period last year to $300 million, whilst operating profits of Z$28 million increased by 74%. The Department Stores experienced sluggish trading conditions in the first quarter with a marked improvement towards the end of the second quarter as consumers made significant purchases in advance of price increases, particularly in large appliances and furniture. The stores are well stocked with imported merchandise at competitive prices. An intensive performance improvement programme has seen an increase in efficiency and improved stockturns. The programme is expected to produce significant returns in the years to come. Stringent credit control has continued to keep the bad debts within acceptable parameters. One new Clicks store was opened in Chinhoyi and the introduction of the Clicks Club Credit facility in September has been enthusiastically received by customers. Year on year percentage sales growth is the highest in the entire group at present. The merchandise in Diskom was rationalised which has resulted in improved gross profits and reduced expenses. Costs in the Franchise Food Chain have been substantially reduced during the period and constant menu revision has resulted in a progressive gain in turnover, despite a large increase in competing outlets. Sales also show a steady improvement as a result of an aggressive promotions programme including live entertainment in the evenings which has proved to be very popular in selected Bulldogs Pubs. Outlook The group is well aware of the risks related to the 'Year 2000' problem. A formal programme driven at director level, continually monitors our exposure and addresses any issues as they arise. The Group will maintain some borrowings in Zimbabwe and keep its United States dollar investment, presently US$44 million, intact while the Zimbabwe dollar exchange rate remains weak. The Group continues to look for opportunities to invest the United States dollars in activities which have a United States dollar related earning capacity. It is significant that the Zimbabwe dollar equivalent of our United States dollar investment, together with our quoted investment, represents over 60% of our total market capitalisation. On the assumption that there will be a good rainy season, high inflation in the medium term, and a weak exchange rate, the rising trend in turnover on comparable activities should continue to grow in line with the Group's experience in recent months. This growth together with our share of the profit arising from the investment in the Victoria Falls Hotel, will have a favourable impact on group profitability. J R T MOXON Chairman DIVIDEND ANNOUNCEMENT On the 11 November 1998, the Board approved an interim dividend Number 58 of 40 cents per share on 152 895 305 shares payable to members registered in the books of the company at the close of business on 4 December 1998. The Transfer Books and Register of Members will be closed from 5 December 1998 to 13 December 1998. Dividend cheques will be mailed to shareholders on or about 14 December 1998. The dividends payable to non-resident shareholders will be paid in accordance with Exchange Control Regulations. Shareholders' withholding tax will be deducted where applicable. By order of the Board A. P. Lane-Mitchell Company Secretary 11 November 1998 Meikles Africa Limited Financial Highlights 6 months 6 months 12 Months to 30 to 30 to September September 31 March 1998 1997 1998 Group turnover (Z$m) 1,701 1,227 2,826 Group operating profit (Z$m) 164 100 250 Headlines earnings per share 552 86 245 share (Zcents) Operating cashflow per share 112 40 126 (Zcents) Dividend proposed (Zcents) 40 30 65 Dividend cover (times)* 1.2 1.5 1.7 Capital expenditure (Z$m) 75 62 169 * excluding exchange gains The unaudited results of Meilkes Africa Group of companies in respect of the six months ended 30th September 1998 are as follows: Consolidated Income Statement for the six months ended 30 September 1998 Unaudited Unaudited Audited (Restated) (Restated) 6 months to 6 months to Year ended 30 September 30 September 31 March 1998 1997 1998 Z$000 Z$000 Z$000 Turnover 1,701,119 1,227,126 2,826,344 Gross profit 448,887 302,065 692,738 Operating expenses (285,234) (202,400) (442,564) Operating profit 163,653 99,665 250,174 Net exchange gains 767,968 59,217 203,841 Net interest (expense) / (19,812) 16,588 27,041 income Profit before taxation 911,809 175,470 481,056 Taxation (59,101) (37,130) (86,676) Profit after taxation 852,708 138,340 394,380 Minority interest (12,064) (8,412) (22,412) Net profit attributable to shareholders 840,644 129,928 371,968 Dividends (61,158) (45,869) (99,382) Transferred to retained 779,486 84,059 272,586 earnings Earnings per share - 550 85 243 basic (cents) IIMR Headline earnings per share (cents) 552 86 245 Consolidated Balance Sheet as at 30 September 1998 Unaudited Unaudited Audited (Restated) (Restated) 30 September 30 September 31 March 1998 1997 1998 Z$000 Z$000 Z$000 ASSETS Non-current assets 1,137,423 603,716 732,837 Current assets 2,410,383 1,225,906 1,466,266 Total assets 3,547,806 1,829,622 2,199,103 EQUITY AND LIABILITIES Capital and reserves 2,128,711 1,160,698 1,349,225 Deferred tax 169,179 111,450 132,705 Minority interest 12,815 14,929 9,799 Non-current liabilities 654,885 105,290 139,986 Current liabilities 582,216 437,255 567,388 Total equity and 3,547,806 1,829,622 2,199,103 liabilities Consolidated Cashflow Statement for the six months ended 30 September 1998 Unaudited Unaudited Audited 30 September 30 September 31 March 1998 1997 1998 Z$000 Z$000 Z$000 Cash flows from operating activities Profit before taxation 911,809 175,470 481,056 Adjustment for non-cash (717,819) (52,013) (184,058) items Operating cash flow before working capital changes 193,990 123,457 296,998 Utilised in working (22,136) (62,630) (104,324) capital changes Operating cash flow 171,854 60,827 192,674 Income tax paid (10,149) (899) (24,511) Net cash from operating 161,705 59,928 168,163 activities Net cash used in (488,833) (64,931) (198,019) investing activities Net cash from / (used in) financing activities 381,773 (118,660) (139,678) Net effect of exchange rate changes on cash 767,968 59,217 203,841 and cash equivalents Net increase / (decrease) in cash and cash 822,613 (64,446) 34,307 equivalents Cash and cash equivalents at 31 March 1998 821,257 786,950 786,950 Cash and cash equivalents at 30 September 1998 1,643,870 722,504 821,257 Accounting policies The accounting policies are the same as those used in preparing the 31 March 1998 Financial Statements, except in relation to deferred taxation, which has been changed to comply with revised International Accounting Standard 12, on income taxes. In prior years, deferred tax was provided for on the partial basis but the group now provides deferred tax on the comprehensive basis. The effect of this change is an increase in the tax charge for the current and prior six month period by $36,474,000 and $15,299,000 respectively and the year to 31 March 1998 by $36,553,994. Retained earnings and minority interest at 31 March 1998 have been reduced by $126,431,899 and $6,273,192 respectively. The Group's accounting policies comply in all respects with International Accounting Standards. END IR FCNCKDDDBNDD
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