Coronavirus lockdown measures drag Meikles third-quarter earnings

Meikles Limited's Executive Chairperson, John Moxon
  • Revenue retreats by 7% in inflation adjusted terms
  • Sales Volumes decline by 4%
  • Bulk tea production grew by 41%

Harare – Hospitality and retail group Meikles Limited posted a 7% slump in its inflation-adjusted revenue for the third quarter 31 December 2020 compared to the same period last year as a result of slow operations due to the COVID-19 induced lockdown restrictions.

The Group’s revenue contracted by 8% for the nine months to date above prior year.

This performance was partly eased by the relaxation of lockdown restrictions towards year-end 2020 which resulted in an increase in trading hours and the re-opening of the hospitality segment for domestic tourism which then boosted the company’s operations.

Sales volumes at the supermarket segment declined by 4% and 22% for the quarter and year to date respectively compared to the same period last year.

However, sales volume for the year to date improved by nine percentage points from a 31% decline for the half-year ended 30 September 2020.

Meanwhile, the agricultural segment, that is bulk tea production benefited from early rains and grew by 41% and 6% for the quarter and year to date respectively, but was 17% behind last year for the half year-end the 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,” the Group said in a statement accompanying the trading update.

“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.”

On a positive note, packed tea and coffee sales volume grew by 24% and 18% for the quarter and year to date respectively.

The Group also mentioned that the profit after tax for the quarter ended 31 December 2020 exceeded that of the same period prior year in both inflation-adjusted and historical cost terms.

On the outlook, the Group said that 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,” the Group said.

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