MEIKLES LIMITED
TRADING UPDATE FOR THE THIRD QUARTER
AND NINE MONTHS ENDED 31 DECEMBER
2020
TRADING ENVIRONMENT
COVID-19 lockdown restrictions were moderately eased during the
quarter ended 31 December 2020.
Resultantly, trading hours for the Group’s operations increased. In
addition, the hospitality segment re-opened albeit for domestic
tourism only.
Group operations were adequately stocked during the festive
season as our supply chains benefited from increased trading hours
and improved access to foreign currency from the auction
system.
GROUP PERFORMANCE HIGHLIGHTS
In inflation adjusted terms, Group revenue retreated by 7% and
8% for the quarter and nine months to date, respectively. Group
revenue, in historical cost terms grew by 487% and 575% for the
quarter and year to date, respectively.
Sales volume at the supermarkets segment declined by 4% and 22%
for the quarter and year to date respectively, relative to same
period of the previous year. Sales volume for the year to date
improved by nine percentage points from 31% decline as at the half
year ended 30 September 2020.
For the agriculture segment, bulk tea production benefited from
early rains and grew by 41% and 6% for the quarter and year to
date, respectively. Bulk tea production was 17% behind last year as
at the half year ended 30 September
2020. In volume terms, bulk tea export sales were behind
last year by 8% and 10% for the quarter and year to date,
respectively. Average bulk tea export price for the quarter of
US$1.39/kg was on par with the
average price achieved same period last year but was 6% behind last
year for the year to date. Packed tea and coffee sales volume grew
by 24% and 18% for the quarter and year to date respectively.
Group profit after tax for the quarter ended 31 December 2020, exceeded same period of last
year in both inflation adjusted and historical cost terms.
FINANCIAL POSITION
The Group statement of financial position at 31 December 2020 reflects the Group has
sufficient resources at its disposal to fund the planned capital
expenditure and challenges arising from COVID-19 implications.
OUTLOOK
The start of the fourth quarter coincided with the second wave
of COVID-19 affecting the country, South
Africa, and major international source markets for the
tourism segment. In response, the Government scaled up the
restrictions on movement of people to curtail the spread of the
virus. Whilst the Group’s main segments are classified as essential
service and continue to operate, revenue is likely to be affected
by reducing volumes to the end of the financial year and
beyond.
The good rains received this season bodes well for the Group’s
agriculture segment and growth in export crops is expected in the
forthcoming financial year. Our dams are full and power, which is
essential for irrigation and estate factories, will be available
not only from traditional sources, but also from the solar
projects.
By Order of the Board
T MPOFU
COMPANY SECRETARY
12 February 2021