- Group revenue accelerated by 40% ahead of last year
- Hospitality’s revenue per available room increased by 94% in US Dollar terms
- The Group opened two branches and closed the period without borrowings
Harare- Diversified ZSE-listed outfit, Meikles Limited Zimbabwe remains optimistic about future growth prospects after displaying commendable revenue growth and hospitality performance for the third quarter ended 31 December 2022.
The graph below shows the Group’s performance in %
The Group, posted a 40% revenue increase for the third quarter and 58% growth for the cumulative 9 months despite record power cuts and an aggressive monetary stance that curtailed the customers’ purchasing power.
Revenue performance was anchored by the hospitality sector where room occupancy grew by 9.85% on quarterly basis and by 18.43% for the cumulative 9 months period. Revenue per available room increasing by 94% and 210% in US$ terms for the quarter and nine months respectively.
Optimism brews at a time the nation is heading towards the 2023 harmonised elections. Zimbabwean elections are on record coupled with fragile monetary policies to support government election programme initiatives.
During the latest 2018 elections, broad money increased by 41% between July 2017 and July 2018 with a day-on-day increase of 6.84%. this resulted in renewed inflationary pressures of above 500% and lastly, the abandonment of the Zimbabwe dollar by the market.
“The Group is optimistic about its prospects despite the evolving challenges in the operating environment,” the Group said in a trading update.
However, one should note that the growth prospects are underpinned by the Group’s financial stability which remains strong with cash and bank balances amounting to more than US$19 million at the end of December 2022.
In addition, The Group has no bank borrowings while both expansion and replacement capital expenditure plans continue to be implemented as the Group has adequate financial resources at its disposal.
During the quarter under review, the supermarkets segment completed and opened two new stores, Pick n Pay Simon Mazorodze and Pick n Pay Madokero with branch network expansion and refurbishments funded from operating cash flows.
However, sales volumes for the supermarkets segment decreased by 16.49% for the quarter but were resilient to the challenges in the operating environment and grew by 2.50% for the nine months period ended 31 December 2022.
Sales were affected by the aggressive 200% bank policy rates by the Central Bank which curtailed consumer spending efficacy.
In addition to that was electricity supply challenges that worsened during the period reducing operating hours while ramping up production costs as the Group resorted heavily to the use of generators.
“Electricity supply challenges worsened during the quarter under review leading to increased use of generators and in some instances reduction in operating hours,” the Group said.
With Zimbabwe missing the 2023 electricity self-sufficiency target and the addition of the Hwange’s Unit 7 to the national grid, power crisis remains a challenge. Besides that, excess reliance on the Kariba Power Station amid recurrent drought spells is a major disappointment. At Hwange, the ageing power plants are failing to function properly with more time channelled towards repairments than electricity generation.
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