Meikles’ HY Profit, Revenue Fall Amid Covid-19 Induced Decline in Sales Volumes

Meikles Limited's Executive Chairperson, John Moxon
  • Revenue down 8%
  • PAT adversely impacted by monetary loss exchanges
  • The Group opened a new store espite Covid-19 constraints

Harare – Hospitality and retail group, Meikles Limited said its profit fell for the half-year ended 30 September 2020 as revenue slid due to COVID-19 induced decline in sales volumes across the Group’s operations.

 The Group’s operations span across retail operations through TM Pick n Pay Supermarkets, agriculture operations under Tanganda Tea Company Limited, Hospitality, Properties and Security Services.

The Group, which earlier this year completed the sale of its long-time flagship asset, Meikles Hotel to ASB Hospitality, posted a profit after tax of ZWL189 million in inflation adjusted terms compared to a profit of ZWL$2.1 billion in the same period last year, adversely impacted by the monetary loss of ZWL1.1 billion from the US$ denominated bank and receivable balances.

Inflation adjusted Group revenue was ZWL 11.2 billion, down 8% compared to the same period of the previous year due to COVID-19 induced decline in sales volumes across the Group’s operations. In historical cost terms, Group revenue grew by 683% to ZWL 8.4 billion compared to ZWL 1.1 billion a year earlier reflecting the effect of inflation driven price increases and exchange rate movement on local and export sales respectively.

Giving a highlight of segmental contributions to the Group’s financial performance, Group Executive Chairperson John Moxon said revenue from supermarkets for the period under review was ZWL 10.0 billion in inflation adjusted terms, down from ZWL10.8 billion same period last year.

“Units sold declined by 31% during the period under review due to COVID-19 restrictions and shrinking disposable incomes. The segment lost trading days as seven branches closed for days for disinfection purposes following COVID-19 cases,” he said.

Operating profit for the period amounted to ZWL 306.1 million in inflation adjusted terms, compared to ZWL 411.7 million achieved in the previous period.

However, despite constraints brought about by COVID-19, the segment opened a new store in Aspindale, Harare in July 2020 while work is at an advanced stage for another new branch in Harare that should be opened before the end of December 2020.

Likewise, revenue from the agriculture operations under Tanganda Tea operations declined by 15% in inflation adjusted terms to ZWL935 million compared to ZWL1.1 billion achieved during the same period last year.

Bulk tea export sales of 3 282 tonnes were 11% lower than 3 669 tonnes sold in the comparative period last year.

Mr Moxon further highlighted that average international bulk tea export price for the period retreated to US$1.35/kg from US$1.47/kg in the six months’ period to 30 September 2019. Bulk tea production for the period declined by 17% primarily due to adverse weather while packed tea sales volumes grew by 14%.

Meanwhile, the volume of Macademia production declined by 37% while the volume of avocado sales export grew by 15% but average price declined by 37% due to the lockdowns in Europe that resulted in massive closure of restaurants and hotels.

The hospitality segment also felt the pinch for the entire period under review as international tourism and travel was disrupted by the COVID-19 pandemic.

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