MEIKLES
LIMITED
TRADING UPDATE FOR THE FOURTH QUARTER
AND FULL YEAR TO 31 MARCH 2020
COVID-19 IMPACT
The Group has repaid all bank borrowings other than limited ZWL
bank borrowings restricted to the export sectors of the Group.
All of these borrowings are offset by greater sums on deposit
in banks, both US$ and ZWL, the Group as a whole being cash
positive. Cash flows are also positive, with the result that
the Group foresees no difficulties in funding its development plans
and its working capital requirements. The Group is able to continue
paying dividends to its shareholders.
Both Tanganda and TM Supermarkets continue to trade with a
positive variance relative to sales and profit targets set prior to
the advent of COVID-19. Tanganda is progressing on the installation
of solar power. The lockdown has caused some delay, but 72 percent
of the project consisting of 5.4 Megawatts (“MW”) will be completed
within the next six months. The balance of 2.15 MW will be
completed thereafter.
The Victoria Falls Hotel closed at the outbreak of the virus and
its date of reopening is uncertain. However, the hotel has
financial resources of its own to survive a prolonged period of
closure on care and maintenance. The renovation project has been
placed on hold. The Cape Grace Hotel in Cape Town has also been closed and is on care
and maintenance, but in financial terms it has similar financial
resources as the Victoria Falls Hotel.
Overall the Group believes that it will progress in a
satisfactory position of financial strength and profitability in
the foreseeable future, within targets of performance established
before the advent of COVID-19. The lockdown has caused certain
commercial difficulties, but management have an appropriate
response to challenges.
The Group is well equipped on materials required for the safety
of both employees and customers.
The Group along with the Meikle Foundation continues to assist
the community in its fight against the ravages of the
coronavirus.
SEGMENTS PERFORMANCE
Supermarkets
Sales volume retreated by 10% and 21% for the quarter and full
year respectively, compared to the same period last year. Fourth
quarter sales volume was enhanced by bulk buying of supplies by
consumers after Covid-19 was declared a state of national disaster
on 14 March 2020.
Agriculture
The volume of Macadamia and Avocado export sales for the full
year grew by 129% and 39% respectively compared to the same period
last year. This growth is production as well as sales has more than
offset a decline in tea production for the quarter by 10% and by
18% for the full financial year. Sales of tea in the local
market and in packeted form have declined but not to the extent of
the overall decline in market volumes.
Hospitality
Room occupancy retreated by 20.79 and 9.66 percentage points for
the quarter and full year respectively against the comparative
period for the operation in Victoria
Falls. Room occupancy for the fourth quarter was
adversely impacted by the outbreak of COVID-19. Meikles Hotel
disposal took effect on 1 March 2020.
Room occupancy at Meikles Hotel was 1.96 percentage ahead of the
first two months of the same quarter last year. Occupancy for
eleven months to 29 February 2020
declined by 8.60 percentage points compared to the same period last
year.
GROUP FINANCIAL PERFORMANCE
Group financial performance for the quarter and for the full
year to 31 March 2020 is anticipated
to be well in excess of the half year period ended 30 September 2019.
By Order of the Board
T Mpofu
Company Secretary
15 May 2020