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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 AUDITED FINANCIAL STATEMENTS FOR THE YEARED 31 MARCH 2018
CHAIRMAN'S STATEMENT
It gives me pleasure to present the Chairman's Report for the financial year
ended 31 March 2018.
FINANCIAL OVERVIEW
The abridged financial statements are now audited. The Company has decided not
to account for sums due from the Government of Zimbabwe in the year under
review. The history of this matter speaks to the unilateral acquisition of
Meikles Limited funds by the Reserve Bank of Zimbabwe in 1998.
Government has committed itself to pay the amount due to the Company and the
sums will be included in the financial statements when the final receipt is
confirmed. The settlement will include an agreement on interest to be paid to
the Company and will provide for payment to be made progressively in tranches.
It is believed the total payment will be received by the end of March 2019. The
receipt of funds from Government will be material to the future direction of
the entire Group.
GROUP FINANCIAL RESULTS
The Group performed well during the year under review.
Due to the late release of the audited financial results for reasons explained
to Shareholders, it is considered appropriate to provide Shareholders with
information on Group performance for the first four months in the financial
year to 31 March 2019. This information is included in the section of this
report headed "Outlook".
Group earnings before interest, taxation, depreciation and amortisation
("EBITDA") have grown from US$12.2 million in the financial year to 31 March
2016 to US$24.8 million in the financial year to 31 March 2017 to US$41.1
million in the year under review.
Revenue has grown from US$453.6 million in 2016 to US$457.6 million in 2017 to
US$534.9 million in the year under review.
Segmental contributions to Revenue and EBITDA are set out in Note 5.
Profit before taxation has grown by 225 percent to US$19.2 million (2017 US$5.9
million).
REVIEW OF OPERATIONS
Supermarkets - trading as TM and Pick n Pay
EBITDA grew by 45 percent to US$34.5 million. The segment traded in 55
stores. In the forthcoming financial year, the segment plans to open a number
of new stores and there will be further upgrades of existing stores. Consistent
growth is anticipated in the coming year.
The segment has no borrowings and has the resources to implement future growth.
Agriculture
EBITDA grew to US$10.3 million from US$6.1 million in the previous year.
The quantum of tea harvested on the Tanganda Estates was an all-time record on
a calculated comparative basis. Selling prices for tea, avocados and macadamias
were greater than in the previous year.
The avocado and macadamia areas planted over the last years are significant in
size, but remain largely immature. Although volumes of both crops were
significantly greater in the year under review than in the previous year, the
process to maturity on the existing plantations will take another three years.
Once maturity is reached, production in these areas will exceed current
production levels by a very significant tonnage. Sales and profit contribution
are expected to grow over the next three years to a level where the historic
dependence on tea, both in bulk and in packeted form, will be diminished, not
in terms of a reducing tea performance, which is expected to continue to grow
in contribution, but by enhanced overall performance following the impact of
the new agricultural products.
Tanganda invested in certification by Rainforest Alliance of 706 small scale
tea growers. This development will benefit small scale farmers with improved
revenues. The development will assist in the conservation of biodiversity and
natural resources for the benefit of both present and future generations.
Hospitality
EBITDA increased to US$4.1 million in the current year from US$1.8 million in
the previous year.
Sales and profits include the entire results of Meikles Hotel and only 50
percent of The Victoria Falls Hotel, where the segment is in equal
partnership with a third party.
A refurbishment programme for The Victoria Falls Hotel will commence before the
end of 2018. However, of greater significance a project to enlarge the hotel
with additional accommodation is currently in the initial stages of planning,
and implementation is to be expedited.
Both hotels are benefiting from a growth in occupancy during the first months
of the new financial year.
Retail and properties
The EBITDA loss in retail at US$4.2 million was almost identical to the loss of
US$ 4.1 million in the previous year.
This segment was badly affected throughout the year by the absence of funds due
to the Group from Government, a position which is still prevalent in the early
months of the new financial year. All Mega Market and M stores have been
permanently closed, partly in the latter months of the year under review and
partly in the early months of the new financial year.
Management has successfully reduced expenditures, so going forward losses are
reducing.
With the knowledge that funding is to be forthcoming, the segment will focus
on a retail offering that is compatible with the forward requirements of a
smaller but more specialised retail offering.
The commercial real estate properties owned by the Group are very well located
in the major city centres. These buildings are currently being analysed for
redevelopment along a similar concept to that achieved at Village Walk,
Borrowdale. It is anticipated that these projects, when completed will generate
substantial rental revenue for the Group, together with growth in capital
values.
Financial Services
In order to focus on the activities of our main segments, the financial
services operation was sold at a profit during the year under review.
Security Services
Meikles Guard Services continue to provide guard services to both Group
companies and to certain third parties. It is anticipated that further third
party contracts will be secured.
MEIKLES FOUNDATION
The Meikles Foundation continued to focus its attention and energy helping the
under privileged and disadvantaged. The Foundation has worked closely with both
Roundtable and TM Pick n Pay in efforts to raise funds, supply food, blankets,
clothing and medication to the needy. An annual fund raising golf championship
partnering TM Pick n Pay resulted in funding to the Rainbow Children's Home,
KidzCan Zimbabwe, Cleveland Dam residents feeding programme, Island Hospice and
Healthcare and the Arcadia Baptist Church feeding programme. In recognition of
World Water Day, the Meikles Foundation, in collaboration with the Embassy of
Italy, was part of an initiative to raise awareness of the importance of
sustainable water consumption and management.
The Meikles Foundation was involved in the renovation and completion of a space
at the Thomas Meikle Property, Robert Mugabe Road in Harare, for a dance hub
run by Afrikera Arts Space who provide an internationally recognised three year
diploma in all forms of dance and basic business studies. The Thomas Meikle
Library at National Gallery remains a project close to the heart of the
Foundation.
The strategy of the Meikles Foundation is to partner like-minded organisations
who are prepared to work and achieve their project goals and to source funding
both locally and internationally for all projects.
OUTLOOK
Financial performance for the first four months of the financial year to 31
March 2019 have resulted in a growth in turnover of 27 percent to US$213.2
million (previous year US$168.2 million), an improvement in EBITDA of 113
percent to US$20.4 million (previous year US$9.6 million) and an increase in
profit before taxation to US$14.1 million (previous year US$3.0 million).
Overall borrowings net of cash and bank balances as at 31 July 2018 were
US$21.1 million (31 March 2018 US$39.1 million).
Negotiations are in progress with a banking institution to convert present
short term borrowings to medium term loans. This will result in a
rationalisation of our relationships with banking institutions. The process is
expected to be completed by the end of December 2018.
With anticipated receipt of funds from Government, the Group will be in a
position of financial strength. However, the Company may in addition seek
funding from further cash generating opportunities, which will become be
available in the future months.
DIVID
The Board resolved not to declare a dividend for the year.
APPRECIATION
I would like to extend my appreciation to our customers for their continued
support and to our shareholders and regulatory authorities for their support
and guidance. I would also like to extend my thanks and appreciation to fellow
Board members, management and staff for their dedication and commitment.
JRT Moxon
Executive Chairman
27 September 2018
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2018
31 March 31 March
2018 2017
US$ 000 US$ 000
CONTINUING OPERATIONS
Revenue 534,930 457,626
Net operating costs (508,197) (443,908)
Operating profit 26,733 13,718
Investment income 271 2,121
Finance costs (8,640) (9,143)
Net exchange losses (468) (161)
Loss recognised on discounting Treasury Bills (6) (1,429)
Fair value adjustments on biological assets 1,336 789
Profit before tax 19,226 5,895
Income tax expense (11,533) (6,249)
Profit / (loss) for the year from continuing 7,693 (354)
operations
Profit / (loss) for the year from discontinued 501 (392)
operation
Profit / (loss) for the period 8,194 (746)
Other comprehensive income, net of tax
Items that may be reclassified subsequently to
profit or loss:
Reclassification adjustments relating to
available-for-sale financial assets disposed of in 47 441
the current year
Fair value adjustments on available-for-sale - 653
financial assets
Other comprehensive income for the year, net of tax 47 1,094
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 8,241 348
(Loss) / profit for the year attributable to:
Owners of the parent (829) (6,719)
Non-controlling interests 9,023 5,973
8,194 (746)
Total comprehensive (loss) / income attributable
to:
Owners of the parent (782) (5,625)
Non-controlling interests 9,023 5,973
8,241 348
(Loss) / earnings per share (cents)
Basic (0.32) (2.65)
Diluted (0.31) (2.46)
Headline earnings / (loss) per share (cents) 0.08 (2.00)
Diluted headline earnings / (loss) per share 0.08 (1.86)
(cents)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2018
31 March 2018 31 March
2017
US$ 000 US$ 000
ASSETS
Non-current assets
Property, plant and equipment 175,267 172,664
Investment property 239 243
Investment in Mentor Africa Limited 20,046 20,046
Biological assets 1,299 1,147
Intangible assets 124 124
Other financial assets 11,815 11,901
Deferred tax 121 3,427
Total non-current assets 208,911 209,552
Current assets
Treasury Bills - 3,024
Inventories 43,870 34,467
Trade and other receivables 17,341 13,969
Biological assets - produce on bearer plants 2,810 1,867
Other financial assets 3,383 4,134
Cash and bank balances 34,175 15,637
Total current assets 101,579 73,098
Total assets 310,490 282,650
EQUITY AND LIABILITIES
Capital and reserves
Share capital 2,562 2,538
Share premium 1,469 1,316
Other reserves 12,559 12,512
Retained earnings 82,854 83,683
Equity attributable to equity holders of the parent 99,444 100,049
Non-controlling interests 36,241 28,591
Total equity 135,685 128,640
Non-current liabilities
Borrowings 17,309 9,241
Deferred tax 19,189 17,637
Total non-current liabilities 36,498 26,878
Current liabilities
Trade and other payables 82,334 70,155
Borrowings 55,973 56,977
Total current liabilities 138,307 127,132
Total liabilities 174,805 154,010
Total equity and liabilities 310,490 282,650
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2018
Share Share Non-distributable Attributable Non-controlling Total
capital premium reserves Investments Retained to owners of interests
revaluation earnings parent
US$ US$ US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$
000 000 000
2018
Balance at 1 April 2017 2,538 1,316 12,559 (47) 83,683 100,049 28,591 128,640
(Loss) / profit for the year - - - - (829) (829) 9,023 8,194
Issue of shares 24 153 - - - 177 - 177
Other comprehensive income - - - 47 - 47 - 47
for the year
Dividend paid - minority - - - - - - (1,715) (1,715)
shareholders
Non-controlling interests - - - 342 342
arising from Mopani Property - - -
Development (Private) Limited
Balance at 31 March 2018 2,562 1,469 12,559 - 82,854 99,444 36,241 135,685
2017
Balance at 1 April 2016 2,538 1,316 12,559 (1,141) 90,402 105,674 21,182 126,856
(Loss) / profit for the year - - - - (6,719) (6,719) 5,973 (746)
Other comprehensive income - - - 1,094 - 1,094 - 1,094
for the year
Non-controlling interests - - - 1,436 1,436
arising from Mopani Property - - -
Development (Private) Limited
Balance at 31 March 2017 2,538 1,316 12,559 (47) 83,683 100,049 28,591 128,640
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEARED 31 MARCH 2018
31 March 31 March
2018 2017
US$ 000 US$ 000
CONTINUING AND DISCONTINUED OPERATIONS
Cash flows from operating activities
Profit / (loss) before tax - continuing operations 19,226 5,895
- discontinued operation 554 (551)
19,780 5,344
Adjustments for:
- Depreciation and impairment of property, plant and 13,311 11,801
equipment, investment property and biological assets
- Net interest 8,415 8,022
* Dividend income (53) (992)
- Net exchange losses 468 161
- Profit on disposal of operation (768) -
- Fair value adjustments on biological assets (1,336) (789)
* Loss recognised on discounting Treasury Bills 6 1,429
- Loss on disposal of property, plant and equipment 1,545 123
Operating cash flow before working capital changes 41,368 25,099
Increase in inventories (9,403) (1,076)
(Increase) / decrease in trade and other receivables (3,627) 1,317
Increase in trade and other payables 11,895 8,986
Cash generated from operations 40,233 34,326
Income taxes paid (6,447) (3,520)
Net cash generated from operating activities 33,786 30,806
Cash flows from investing activities
Payment for property, plant and equipment (17,717) (14,229)
Proceeds from disposal of property, plant and equipment 350 230
Proceeds from sale of Treasury Bills and coupon interest 3,075 8,809
Net movement in service assets (89) 37
Net movement in other investments 847 (515)
Net expenditure on biological assets 241 (374)
Net cash flow on disposal of subsidiary 1,060 -
Investment income 208 56
Net cash used in investing activities (12,025) (5,986)
Cash flows from financing activities
Net increase / (decrease) in interest bearing borrowings 7,064 (11,745)
Non-controlling interests arising from Mopani Property 519 1,436
Development (Private) Limited
Finance costs (8,640) (9,163)
Dividend paid - minority shareholders (1,715) -
Net cash used in financing activities (2,772) (19,472)
Net increase in cash and bank balances 18,989 5,348
Cash and bank balances at the beginning of the year 15,637 10,494
Net effect of exchange rate changes on cash and bank (451) (205)
balances
Cash and bank balances at the end of the year 34,175 15,637
NOTES TO THE ABRIDGED AUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The abridged audited financial statements 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 financial statements are presented in
United States of America dollars (US$), which is the Group's functional
currency. In the current environment the determination of functional currency
is a significant judgement area. The country's Accounting Profession reviewed
the requirements of the accounting standards and concluded that the US$ was
still the appropriate functional currency.
2. Statement of compliance
The Group's abridged audited financial statements have been extracted from
financial statements prepared in accordance with International Financial
Reporting Standards and the Companies Act (Chapter 24.03) and relevant
statutory instruments (SI33/99 and SI62/96). These abridged set of financial
results should be read in conjunction with the complete set of financial
statements for the year ended 31 March 2018, which have been audited by
Deloitte & Touche Chartered Accountants (Zimbabwe) and an unmodified audit
opinion issued thereon. The auditors have included a section on key audit
matters. The key audit matters were on material uncertainty related to going
concern and contingent assets and liabilities. The auditor's report is
available for inspection at the Company's registered address.
3. Accounting policies
Accounting policies and methods of computation applied in the preparation of
these abridged financial statements are consistent, in all material respects,
with those used in the prior year.
4. Going concern
The Directors assess the ability of the Group to continue in operational
existence in the foreseeable future at each reporting date. As at 31 March
2018, the Directors have assessed the Group's ability to continue operating as
a going concern and believe that the preparation of these financial statements
on a going concern basis is still appropriate.
5. Segment information
31 March 31 March
2018 2017
Revenue US$ 000 US$ 000
Supermarkets 487,822 413,997
Agriculture 28,847 21,173
Hotels 17,646 14,667
Departmental stores 1,881 4,640
Wholesaling 224 4,432
Corporate* (1,490) (1,283)
534,930 457,626
EBITDA
Supermarkets 34,514 23,807
Agriculture? 10,289 6,096
Hotels 4,063 1,814
Departmental stores (2,218) (1,333)
Wholesaling (1,998) (2,797)
Corporate* (3,570) (2,779)
41,080 24,808
The EBITDA figures are before Group management fees.
Segment assets
Supermarkets 126,701 98,532
Agriculture 85,582 76,038
Hotels 46,966 46,460
Departmental stores 23,446 26,899
Wholesaling 1,071 4,196
Corporate* 26,724 30,525
310,490 282,650
Segment liabilities
Supermarkets 56,148 43,314
Agriculture 32,779 30,944
Hotels 23,515 22,782
Departmental stores 18,999 17,286
Wholesaling 10,032 8,690
Corporate* 33,332 30,994
174,805 154,010
*Intercompany transactions and balances have been eliminated from the corporate
amounts. Corporate also includes other subsidiaries that are immaterial to
warrant separate disclosure.
?Current year EBITDA is after adding back US$1.25 million loss on disposal of
coffee bearer plants, which were uprooted to pave way for macadamia trees.
NOTES TO THE ABRIDGED AUDITED FINANCIAL STATEMENTS (continued)
31 March 31 March
2018 2017
6. Other information US$ 000 US$ 000
Capital commitments authorised by the Directors but not 23,583 13,500
contracted for
Group's share of capital commitments of joint operations 3,000 -
7.1 Net borrowings
Non-current borrowings 17,309 9,241
Current borrowings 55,973 56,977
Total borrowings 73,282 66,218
Cash and cash equivalents (34,175) (15,637)
Net borrowings 39,107 50,581
Comprising:
Secured 57,505 55,773
Unsecured 15,777 10,445
73,282 66,218
The weighted average cost of borrowings for the year was 13.39% per annum
(2017: 13.63% per annum).
The Group has issued cross company guarantees worth US$42.1 million (2017:
US$29.8 million) for Group borrowing facilities.
7.2 Breach of loan covenants
During the current year, the Group was in default on some of its loan covenants
with financial institutions. Details of loans in default as at 31 March 2018
are as follows:
* US$4.6 million (2017: US$3.9 million) unsecured borrowing, carrying
interest at 18% p.a. The loan expired on 31 October 2017 and is now subject
of litigation. The loan is from a Government related financial institution.
* US$432,678 (2017: US$3.6 million) unsecured borrowing, carrying interest at
15% p.a. The loan expired on 23 July 2017 and is now subject of litigation.
The loan is from a Government related financial institution.
* US$16.1 million (2017: US$14.7 million) partially secured borrowing,
carrying interest at 12% p.a. The loan is currently on overdraft and
negotiations to extend the tenure are underway.
* Loan instalments and interest amounting to US$1.1 million were in arrears
as at 31 March 2018 for a loan of US$2.1 million (2017: US$2.7 million)
expiring on 31 January 2019.
* Loan instalments and interest amounting to US$673,000 were in arrears as at
31 March 2018 for a loan of US$3.4 million (2017: US$nil) expiring on 31
May 2018. Loan instalments amounting to US$373,000 were in arrears for a
loan of US$4.7 million (2017: US$5.9 million) expiring on 31 July 2021.
* Interest payments amounting to US$151,000 were in arrears as at 31 March
2018 for a loan of US$3.2 million (2017: US$0.9 million) expiring on 31
December 2019.
NOTES TO THE ABRIDGED AUDITED FINANCIAL STATEMENTS (continued)
8. Discontinued operation
On 31 August 2017, the Company signed an agreement to dispose of Tuscarora
Investments (Private) Limited (trading as Meikles Financial Services), which
carried out the Group's financial services operations to Veritran (Private)
Limited. Proceeds received were used in financing working capital requirements
of the Group. The proceeds of sale exceeded the carrying amount of the related
net assets and, accordingly, no impairment losses were recognised. The disposal
of the financial services operations is consistent with the Group's long-term
policy to focus its activities on its main segments, namely retail,
agriculture, hospitality and security services. The results of the discontinued
operation included in profit for the period are as set out below. The
comparative profit and cash flows from discontinued operation have been
re-presented to include the operation classified as discontinued in the current
period.
31 March 31 March
2018 2017
US$ 000 US$ 000
Profit / (loss) for the period from discontinued operation
Net fees and commission income 297 583
Net operating costs (518) (1,125)
Operating loss (221) (542)
Investment income 11 11
Interest expense (4) (20)
Profit on disposal of operation 768 -
Profit / (loss) before tax 554 (551)
Taxation (53) 159
Profit / (loss) for the period from discontinued operation 501 (392)
Cash flows from discontinued operation
Net cash outflows from operating activities (98) (298)
Net cash flows from investing activities 1 (127)
Net cash inflows from financing activities 168 404
Net cash flows from discontinued operation 71 (21)
Analysis of assets and liabilities over which control was lost 31 March
2018
US$ 000
Property, plant and equipment (197)
Deferred tax asset (216)
Inventory (7)
Other financial assets (1,156)
Trade and other receivables (255)
Cash and cash equivalents (224)
Trade and other payables 1,763
Net assets disposed off (292)
Proceeds on disposal 1,060
Profit on disposal of operation 768
Meikles Limited Website : www.meiklesltd.com
END
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