- Revenue soared by 70%
- Measures introduced by government to curb inflation affected consumer spending behaviour
- Victoria falls hotel recorded a record PAT post COVID-19 era
Harare- Zimbabwe Stock Exchange (ZSE)-listed diversified investment outfit, Meikles Zimbabwe Limited has posted strong financial results across all units despite having encountered setbacks from the aggressive fiscal policies implemented by the government to curb inflation.
The group’s revenue and profit after tax for the half-year-ended 30 September 2022 more than doubled despite impact of the hawkish fiscal policies passed by the government during the reporting period.
Government hiked repo rates by a record 120 basis points to 200% while tight monetary policy was pursued in a bid to curb arbitrage opportunities on the parallel market and inflationary pressures. Though the policies, with the introduction of gold coins helped to stabilise the parallel market rate between a region of ZWL850-ZWL900 against a single greenback, they affected consumer purchasing behaviour which ultimately affected the Group’s performance.
“The measures introduced by the authorities to curb rising inflation, starved the economy of ZWL liquidity leading to reduced customer spending,” the Group’s chairperson, John Moxon said in a statement accompanying the half-year financials.
However, despite the setbacks, revenue for the group nearly doubled after advancing by 70% primarily due to a 15.46% increase in units sold combined with price adjustments at the supermarkets segment, which contributed 99% of the Group’s revenue.
Other comprehensive income increased to ZWL14.3 billion from ZWL49 million in the previous year due to the increase in the exchange rate applied to translate the foreign subsidiary financial results to ZWL, the Group’s presentation currency.
“The Group has maintained a strong financial position during the period under review, with a significant foreign currency denominated bank balance,” Moxon added.
On the segment performance, TM Supermarkets trading as TM and PnP’s revenue for the period was ZWL127.8 billion from ZWL76.2 billion bolstered by the growth of 38.6% in units sold during the first quarter. However, in the last quarter, units sold declined by 4.4%, reducing the overall growth for the six months to 15.46%.
A new store was opened in Harare while the refurbishment of the Triangle Store was completed. The group expects to open three new stores during the first quarter of 2023.
In the hospitality sector, operations in Victoria Falls registered a strong recovery from COVID-19 disruptions to international tourism and travel as room occupancy grew from 12.9% to 32.5%. resultantly, revenue was up 244% to ZWL1.3 billion. Profit for the period grew to ZWL1.0 billion from ZWL398 million in the previous year.
“The completion of the first phase of the hotel refurbishment coincided with the rebound in international tourism.”
“The refurbishment of the building along Robert Mugabe Road in Harare commenced during the period under review, with completion anticipated during the first quarter of next year. “
The Company changed its financial year-end from 31 March to 28 February as advised to shareholders on 30 September 2022, therefore the results for the financial period ending 28 February 2023 will be for an eleven-month period.
The Board declared an interim dividend of 0.25 US$ cents per share to be paid on 15 December 2022.
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