HARARE, June 2 (The Source) – Hospitality and retail group Meikles Limited’s topline grew one percent to $457,6 million in the full year to March, driven by an impressive performance of its retail unit as revenues from other segments plummeted.
TM/Pick n Pay Supermarkets contributed 90,5 percent to total revenue. The retailer’s revenue grew by 5 percent to $414 million from $395,3 million in the preceding year despite waning aggregate demand.
Chairman John Moxon said the supermarket segment has been achieving revenue growth annually since 2013. Although operating costs grew by 7 percent owing to incremental costs of new branches, earnings before interest, tax, depreciation and amortisation (EBIDTA) from the supermarkets segment grew by 50 percent to $23,8 million on operational efficiency.
Groupwide net operating costs fell by 2 percent on prior year, translating to a net $7,8 million reduction in costs and offsetting an increase in rentals paid by supermarkets.
The group’s earnings before interest, tax, depreciation and amortisation (EBITDA) doubled to $24,8 million from $12,2 million achieved in the prior year.
Profit before tax recovered to $5,3 million from a previous loss of $17,8 million in the prior year
After tax loss narrowed to $746,000 from $22,675 million previously.
South Africa’s Pick n Pay, which controls 49 percent of the grocery chain, in April put its share of TM’s earnings at R80.2 million (about $6,2 million).
Borrowings were lower at $66,2 million from $78 million in the previous year, with finance costs falling 13 percent to $9,2 million.
Moxon said the group is working on the restructuring of its short-term debt to medium-term.
Total assets increased to $282,7 million from $281,1 million in the previous year.
Net cash generated from operations also rose to $30,8 million from $20,2 million previously.
The agriculture segment generated EBITDA of $6,1 million in the year compared to $255,000 in the previous year, though revenue declined by 6 percent to $21,2 million due to a 20 percent fall in bulk tea exports.
The hospitality segment saw a seven percent decline in revenue to $14,7 million owing to a decline in room occupancy and average room rates in Harare.
Meikles Hotel’s room occupancy and average daily rate declined by 3,41 percent and 13 percent on prior year , resulting in a 20 percent decline in revenue per available room.
Departmental stores and wholesaling segments also recorded a decline in revenue in the year.
The group closed the year with Treasury bills (TBs) amounting to $3,024 million from $11,1 million held in the previous year.
Moxon said the company has reached an agreement with the government over a Reserve Bank of Zimbabwe debt which has been outstanding for two decades.
“The sum due to the company together with accrued interest amounted to $42,6 million as at 30 September 2016,” said Moxon.
“Although the basis of the agreement has been reached, Government has not yet completed the necessary documentation to conclude the formalities relevant to the agreement,” he added.