Meikles raises dividend in line with shifting market dynamics

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Meikles Limited's agriculture operations
  • Declares ZWL10 cents dividend
  • Harsh business operating environment affected performance
  • Benefited from its exporting segments

Harare – As inflation rages, companies are attempting to retain shareholder value and one of the ways is to revise dividends.

Hospitality entity Meikles becomes the latest in a series of companies revising their dividend to declare a dividend that is nominally improved from last year.

In an announcement to shareholders on Tuesday, Meikles notified shareholders that the interim dividend was now 10ZWL cents.

 “Notice is hereby given that on 4 March 2020 the Board of Directors declared an interim dividend (number 80) of 10.0 ZWL cents per share payable out of the Group’s profit for the current financial year.”

The growth represents a growth of 30% on the prior year despite the revision, the real growth may lag the growth in inflation signalling a decline in real dividend.

The dividend is payable on or about 8 April 2020 to shareholders in the company’s register as of close of business on 27 March 2020.

Meikles said disbursements to foreign shareholders is subject to Exchange Control Approval and payment guidelines for foreign payments.

The company declared a final dividend of 7.62 ZWL cents on July 15 which was payable out of the profit of the Group for the financial year ended 31 March 2019.

The company’s revenue in inflation adjusted terms increased by 23% and 14% for the third quarter and nine months period respectively.

Meikles said the increase in revenue was ahead of the percentage increase in operating costs for the nine months and as a result, profit growth was above revenue growth.

During the period under review, sales volumes across the Group’s operations were adversely affected by weak economic fundamentals consisting of foreign currency shortages, raging inflation and intermittent supply of both fuel and electricity which disrupted production.

Room occupancy retreated by 9.32% and 6.18% for the third quarter period and nine months period respectively against the comparative period for the operation in Victoria Falls.

 In Harare room occupancy declined by 4.86% and 6.74% in Q3 and nine months period respectively compared to the same period last year.

The group however benefitted from its exporting segments with regards to access foreign currency for critical inputs.

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